Oregon lawmakers change course, move to curtail tax break that benefits owners of million-dollar historic homes
Oregon lawmakers who were poised to extend a deal that deeply discounts property taxes for owners of historic homes changed course on Thursday and amended the proposal to end the most generous aspect of the tax cut.
The plan would not stop owners who already signed up for Oregon’s historic property incentives from continuing to reap big tax cuts for the remainder of the 10-year period for which they have been approved.
But it would eliminate the big property tax discount for owners who don’t become eligible for a second decade of tax breaks until July 2022 or later. They and other owners of historic homes who apply for a tax break after that date would potentially be eligible for a much smaller tax break than the ones now granted.
An earlier draft proposal would have given owners already signed up for the tax deal until July 2024 to lock in another decade of steep discounts.
Lawmakers on the House Revenue Committee voted unanimously Thursday to make the change and send the proposal to the House floor for a vote. They made the decision days after The Oregonian/OregonLive published an analysis that showed that in Multnomah County, the historic homes property tax break mostly benefitted wealthy owners of highly desirable residences at little risk of demolition. The deal is also available to owners of historic commercial buildings.
Last year, the largest Portland tax break for a home, worth nearly $30,000, went to homebuilder Sean Keys for his family’s 3,100-square-foot home on Northwest 24th Avenue. The home, built around 1900, sold for $2.2 million in 2014, according to county assessor records. Without the tax break, Keys would pay $34,000, The Oregonian/OregonLive calculated, but he was taxed just $4,500, county records show.
The second largest historic property tax break in Multnomah County, county records indicate, went to owners of a seven-bedroom, 7,000-square-foot home in Irvington that Ryan Carson, co-founder of online coding start-up Treehouse, and Gillian Carson, sold last summer for $3.2 million. The arrangement won by the Carsons reduced the 2021 tax bill for the home by nearly $25,000, to $13,254.
Most Portland homeowners getting the break are in neighborhoods in and adjacent to the city’s Southwest Hills, the Nob Hill neighborhood and the eastside neighborhoods of Irvington and Ladd’s Addition. Irvington has more homes signed up for the property tax break than any other neighborhood: 39.
The news organization also reported that lawmakers from both parties had changed direction from plans they described in the fall to limit the tax break to owners of commercial and multi-family buildings.
Under the current version of House Bill 4054, owners of properties listed in the National Register of Historic Places who pledge to do exterior-focused preservation work could delay for a decade any property tax increase tied to the upgrades.
Portland-area recipients of the deal often listed interior renovation projects, such as adding bathrooms to a Mt. Tabor-area home in order to use it as an Airbnb rental, in order to reach the dollar value of investment required to qualify, according to state records.
Lawmakers did not comment during the committee meeting Thursday on why they changed course, what the new version of House Bill 4054 would do, why they wanted to keep the tax incentive for homes as well as commercial properties or any other aspect of their vote.