Some lucky Portland buyers have snapped up houses sold with a tantalizing come-on: years of nearly property-tax-free living.
The Multnomah County Assessor's Office is nearly finished calculating the property tax bills it will mail out next month. For most county residents, the news is predictable: a 3 percent tax increase, the maximum allowed by state law.
But not everybody expects to pay.
Under the city of Portland's Homebuyer Opportunity Limited Tax Exemption Program, 100 homebuyers each year qualify for a 10-year tax holiday on the value of the home's structure (not the land). To qualify, they need to earn no more than Portland's median income for a family of four.
But the deal continues for the full 10 years, even if the home's owner changes. With the rapid appreciation in Portland property values, some owners are flipping their subsidized homes quickly for big profits. The sweetener for buyers: They don't have to meet any income requirements and they still get the tax break.
That's what happened, for example, with a home on North Hunt Street in the Kenton neighborhood. The original buyer under the program purchased it in September 2013 and sold it in 2016 for $166,000 profit. The new buyer benefits from the remaining seven years of a tax break.
"That's ridiculous," says Chuck Sheketoff, executive director of the Oregon Center for Public Policy. "It makes no sense to pass along the tax break without the income limitation."
Javier Mena, assistant director of the Portland Housing Bureau, disagrees. Mena explains that the bureau used to require subsequent buyers to also earn below median income, but enforcement proved expensive and ineffective. He says the goals of the program have also shifted over time.
"Initially, we were trying to improve neighborhoods with the program," Mena says. "Now, it's about creating home-ownership opportunities. We think it's working."