Housing Services:
Rental Rehabilitation Tax Abatement Program Guidelines

Currently the City of Portland offers a 10-year limited tax property abatement (authorized by State Legislature ORS 308.450 & ORS 458.005) on any increase in assessment value that results from the rehabilitation of, or conversion to, qualifying rental units. The property owner will not pay taxes on the increase in assessed value due to rehabilitation work for 10-years; however, the property owner will continue to pay taxes on the assessed value of the Land and original Improvement value during this period, as well as any incremental increase allowed under Measure 50. It is important to note that your taxes will not go down and that the assessed values will not be frozen as a result of the program. You are strongly encouraged to discuss your construction plans and schedule with the program administrator as soon as possible if you think that you could benefit from the program.

This program will only benefit those property owners whose property taxes will increase as a direct result of the rehabilitation. Property taxes will not go down from their current rates.

The criteria are as follows:

• The owner of the property must enter into an Affordability Agreement, and designate a certain percentage of the units affordable to tenants with a household income of 60% of median family income or less. The required percentages are as follows:
  • 100% of the units for a single family house
    (the entire house)
  • 50% of the units for a duplex
    (one of the two units)
  • 30% of the units in a triplex
    (one of the three units)
  • 25% of the units in a 4-plex
    (one of the four units)
  • 20%, at least, of the units in a project containing five or more units
    (See Income/Rent Guidelines for rates, which represent total tenant rent burden, a.k.a. both rent and utility costs.)
    
• The home must have code violations as determined by Title 29 Property Maintenance Regulations. An initial inspection by a PDC inspector is required to identify existing violations immediately after application, and then a final inspection to verify that the identified violations have been satisfactorily addressed. Work completed before the date of the application will not qualify for the abatement.
• For homes built before January 1, 1961, rehabilitation expenses must equal or exceed 5% of the property's assessed value as reflected in the last assessment roll preceding the application date. Homes built after January 1, 1961 require rehabilitation expenditures of 50% of the property's assessed value at the time of application. After all the desired rehabilitation work (and that which is required by the initial inspection) has been completed, the PDC will collect receipts for the rehabilitation work to determine if adequate expenditures have been made.
• Submit annual rent roles for all units, accompanied with tenant verification (signature) and leases for those units that are rent restricted. Annual allowable rents will update yearly- please contact PDC to determine if the rents change year to year.

The Portland Development Commission, in conjunction with the Multnomah County Tax Assessor's Office, will determine the property's eligibility based on the required information and criteria listed above. Should your property be determined eligible, you will be required to finish all rehabilitation work and submit all materials within 2-years of the date of application. Your abatement will not begin until all materials are submitted and the property is enrolled in the program. The property owner will be responsible for any taxes levied prior to the date of enrollment. Should you decide to sell the property, the abatement will transfer to the new owner if they choose to adhere to the terms and submit annual reports.

To apply:

1. Complete and send the Application for Determination of Eligibility (ADE) and submit the nonrefundable application fee. Please make your check out to the Portland Development Commission. After we receive your fee and ADE, we will deposit your check and forward your application to the Tax Assessor to establish the home's pre-rehabilitated assessed value.

You will receive a letter either stating that your property is not eligible, or you will be provided with a list of materials needed with which to determine qualification and to finish the application.

2. After you submit your application and your property is deemed eligible, you will need to make an initial inspection appointment for violations. Once the inspection is made, you will receive a letter listing which violations must be addressed before qualifying for the abatement. You have two years from the date of your application to address your properties code violations, and any additional work that you had planned. Rehabilitation work that was finished before the date of application will not qualify for the tax abatement.

3. Once you have completed the rehabilitation work, including all violations found during the first inspection, please call the inspector directly to make a final inspection appointment.

4. Speak with the program administrator to determine an appropriate way to determine if sufficient expenditures are made, and submit proof (i.e. contractor bids, receipts, etc.).

* Required materials to complete your application:

• Application for Determination of Eligibility
• Application for Certificate of Qualification
• $300 (plus $5 for every unit over 2) Application fee paid to the Portland Development Commission (nonrefundable), $450 Multnomah County Tax Assessor fee. (Please pay the entire fee as one check payable to the Portland Development Commission.)
• An initial inspection to determine existing code violations
• A final inspection to confirm that violations have been addressed
• Receipts showing that 5% or 50% of your current property tax assessment have been spent on rehabilitation (the PDC will accept construction bids as proof of expenditure—even if you are planning to do the work yourself)
• If building permits are obtained, you must provide copies of each

If you have any questions please call 503-823-3270 or e-mail.

for Housing Services' News & Information E-Mail List

We value your input: Let us know what you think about our new website design.

for PDC's News & Information E-Mail Lists
Archive of sent E-Mails
Unsubscribe from our E-Mail Lists