Or. Admin. R. 150-307-0230 - Valuation of Summer Home Properties

Current through Register Vol. 61, No. 4, April 1, 2022

(1) Real property belonging to the United States leased for summer homes is exempt from taxation. This exemption applies only to the land. Leased fee and leasehold (or possessory) interests in the land are exempt. No value for land shall be shown on the assessment roll.
(2) Improvements to the land are site developments and are taxable. Site developments include such items as water systems, septic systems, roadways, electrical service, and landscaping. The value of site developments shall be included on the improvement portion of the assessment roll.
(3) Improvements on the land such as buildings and structures are taxable.
(4) Appraisal methods for valuing these properties will vary depending on available market data. Regardless of the method used, care and consideration must be taken to avoid taxation of the land or any interests in the land. Appraisal methods to be used include:
(a) Reproduction or replacement cost new less allowances for various forms of depreciation.
(b) Sales comparison of summer home properties which may be owned fee simple. In using this method, care must be taken to recognize the tenuous nature of Forest Service leases and permits.

Example: Comparison of improvements. Sales of comparable improved properties owned in fee simple indicate a market value of $75,000. The land value for these properties is indicated from land sales to be $15,000. Thus, an indicated value of $60,000 ($75,000-$15,000) is indicated for the improvements of the subject summer home property. This value may not be applicable for the summer home property if the lease term (or expected continuation of the lease) is less than the anticipated life of the improvements.

Example: Land to property ratio. Sales of comparable improved properties owned in fee simple indicate a land to property ratio of 20% and a market value of $75,000 for the subject summer home property. Thus, the indicated value for the summer home property is $60,000 (80% times $75,000).

(c) Income capitalization. This approach is generally not applicable to summer home properties because they are not typically rented on a month-to-month basis. Also, lease payments made to the U.S. government for use of the land are usually very favorable to the lessee, making capitalization of this income stream unreliable as a value indicator.

Notes

Or. Admin. R. 150-307-0230
RD 9-1992, f. 12-29-92, cert. ef. 12-31-92; Renumbered from 150-307.183, REV 55-2016, f. 8-13-16, cert. ef. 9/1/2016

Stat. Auth.: ORS 305.100

Stats. Implemented: ORS 307.183

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