Homeowners see modest tax increases as Salem property values rise quickly

A typical Salem homeowner will pay about $123 more in property taxes this year to fund the operation of local schools, the city of Salem and county government.

Tax data from Marion and Polk counties also shows that the rapid rise in home values over the past two years is cooling off, with the total market value of residential property rising 5.1% in Marion and 8% in Polk counties. 

The total value of all residential and business property in Marion County was $69.7 billion, an increase of 5.7% from last year. In Polk County, property values grew to $16.9 billion, an 8% increase.

In 2022, property values grew 15.9% in Marion County and 22% in Polk County, driven largely by skyrocketing home prices and new construction.

Property value increases include both rising value on existing property and adding newly-constructed buildings to local tax rolls.

Commercial and industrial values grew substantially in both counties, in part thanks to new properties.

Amazon will pay taxes for the first time this year on the large warehouse built in 2019 off Oregon Highway 22 in southeast Salem. That property is valued at $111 million and owes $1.6 million in taxes this year, deputy assessor Nate Combs said. Last year, with exemptions in place, Amazon owed $91,364 in taxes on that property.

Amazon received a three-year tax break for building in an enterprise zone, a special area of the city intended to spur development on what was once farmland.

Several large industrial buildings in west Salem sold at a significant increase from previous sales, Polk County assessor Valerie Patoine said, boosting the county’s industrial property values.

Homeowners see slight tax increases

Property tax statements were mailed out last week to property owners in Marion and Polk counties. Bills are due by Nov. 15.

County assessors use sales data to determine a property’s market value. A home is taxed based on the assessed value, a lower number that was capped by state law in the 1990s. In both Marion and Polk county, a typical house’s taxable value is about half its market value, and the assessed value can rise at most by 3% each year.

The 2023 value on this year’s property tax statements is as of Jan. 1.

In Marion County, an average Salem homeowner will pay $4,405 in taxes, up from $4,282 in 2022. The increase is because the assessed value of an average home increased to $224,430 this year, up from $217,900 in 2022.

The tax rate — how much a homeowner pays per $1,000 their home is assessed at — fell slightly for Salemites in Marion County. In 2023, it’s $19.63 per $1,000 in value, compared to $19.65 last year.

In Polk County, an average west Salem homeowner can expect to pay $4,864 in property taxes for 2023, up from $4,699 last year.

The increase is due to a slightly higher tax rate of $18.85, up from $18.79 last year, as well as the increase in property values. A typical home was assessed at $258,000, an increase from $250,000 last year.

Marion County property owners with questions about their taxes or who disagree with their property valuation can contact the Assessor’s Office at 503-588-5144. Combs said the office has an informal review process in place where people can get help until early December without filing a formal appeal.

In Polk County, people with questions can call the tax office at 503-623-9264.

City, schools will take in more taxes

The Salem-Keizer School District is the biggest recipient of local taxes and will collect about $98 million to fund operations between Marion and Polk counties, a 4.1% increase from 2022.

The school district will collect another $65.7 million to pay off bonds, debt approved by voters to fund school construction and renovation projects.

The city of Salem will collect about $83 million from local property owners in both counties, a 4.2% increase from 2022.

That money is the largest source of revenue for Salem’s general fund, which pays for basic city operations like police, fire, emergency medical services, park operations and the library.

City officials are expecting a $16 million budget deficit in the general fund for 2024, and have pointed to the state’s property tax system as a major reason for the shortfall, saying the cost of wages, pension obligations and materials is growing faster than property tax revenue.

Paying off city debt from the construction of a new police station, the seismic retrofit of the library and other infrastructure projects will take tax collections of another $18.8 million.

New developments spur growth

Two large housing developments in Salem will pay taxes for the first time this year.

The complex at 5056 Countryside Dr N.E., valued at $76.5 million, owes about $641,000 in taxes.

The Jory Apartments, at 909 Park Ave. N.E., are valued at $57.7 million with property taxes totaling $676,000.

Major developments in Polk County added to tax rolls include the new Monmouth Commons, Osprey Landing and a new Taco Bell in Monmouth, Patoine said. 

In west Salem, Orchard Heights Apartments is the top taxpayer, with a tax bill of $667,000 on a $64.6 million property.

Contact reporter Rachel Alexander: [email protected] or 503-575-1241.

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Rachel Alexander is Salem Reporter’s managing editor. She joined Salem Reporter when it was founded in 2018 and covers city news, education, nonprofits and a little bit of everything else. She’s been a journalist in Oregon and Washington for a decade. Outside of work, she’s a skater and board member with Salem’s Cherry City Roller Derby and can often be found with her nose buried in a book.