Current through Register Vol. 61, No. 4, April 1, 2022
For purposes of this rule, these words
and phrases have the following meanings:
"Unit of property" means the item, structure, plant, or integrated complex as
it physically exists on the assessment date.
(b) "Real property" means the real estate
(physical land and appurtenances, including structures, and machinery and
equipment, that comprise an integral part of the property or manufacturing
operation) and all interests, benefits, and rights inherent in the ownership of
the physical real estate.
"Rural lands" means those lands with property classification 400, 401, 500,
501, 600, 601, 800, and 801 as defined by OAR 150-308-0310
. They are
distinguished from platted land as acreages in varying sizes and are either
improved or unimproved.
"Utility" means the quality or property of being useful, which may either add
to or subtract from real market value.
(e) "Highest and best use" means the
reasonably probable use of vacant land or an improved property that is legally
permissible, physically possible, financially feasible, and maximally
productive, which results in the highest real market value.
(f) "Just compensation to the owner" means
the amount of compensation for a property that an owner would expect for the
taking through condemnation of their property. Just compensation is the real
market value of the property at its highest and best use.
Methods and Procedures for Determining
Real Market Value:
(a) For the valuation of
real property all three approaches, sales comparison approach, cost approach,
and income approach, must be considered. For a particular property, it may be
that not all three approaches are applicable. However, each approach must be
investigated for its merit in each appraisal.
(b) The real market value of a unit of
property may not be determined from the market price of its component parts,
such as wood, glass, concrete, furnaces, elevators, etc., each priced
separately as an item of property, without regard to its being integrated into
the total unit.
(c) In utilizing
the sales comparison approach, only actual market transactions of property
comparable to the subject, or adjusted to be comparable, may be used. All
transactions utilized in the sales comparison approach must be verified to
ensure they reflect arms-length market transactions. When non-typical market
conditions of sale are involved in a transaction (duress, death, foreclosures,
interrelated corporations or persons, etc.), the transaction may not be used in
the sales comparison approach unless market-based adjustments can be made for
the non-typical market condition.
(d) If there are no market transactions of
property comparable to the subject, then it is still appropriate to use market
value indications derived by the cost and income approaches.
(e) Sales on the basis of disposal at salvage
or scrap levels are indicators of market value only when on the assessment date
such disposal of the subject property is imminent, or has actually taken
(f) The cost approach must
use the reproduction, replacement or used equipment technique. However,
original historical cost may be used when appraising property under ORS
308.730. The value
estimate must include all costs required to assemble and construct the unit of
(g) The income to be used
in the income approach must be the economic rent that the property would most
probably command in the open market as indicated by current rents being paid,
and asked, for comparable space. Income from the operation of the property may
be utilized for property types, such as industrial plants, that are not
typically leased or rented.
real market value for rural lands is based on an average price per acre for
each size of parcel. Adjustments to the value must be made to those acres with
more or less utility. For improved parcels, the value of the site developments
as defined by OAR 150-307-0010
must be added.
(i) Determining highest and best use for the
unit of property is necessary for establishing real market value. This
determination of highest and best use may include, among others, all possible
uses that might result from retaining, altering, or ceasing the integrated
nature of the unit of property.
Valuation of Special Purpose Property:
(a) Special purpose property is property
specially designed, equipped, and used for a specific operation or use. This
may occur because the special purpose property is part of a larger total
operation or because of the specific nature of the operation or use.
(b) Some, but not all, special purpose
property may be designed without concern for marketability.
(c) Market sales data for the property at its
highest and best use may not exist for a special purpose property, which is
what is meant by the phrase "no immediate market value" in ORS
Where there is no immediate market value, real market value is determined by
estimating just compensation for loss to the owner of the unit of property
through either the cost or income approaches, whichever is applicable, or a
combination of both.
Real market value for all personal property must be determined as of the date
of assessment and must take into account the location and place in the level of
trade of items of property in the hands of manufacturers, producers,
wholesalers, distributors, retailers, users, and others.
Admin. R. 150-308-0240
11-59; 8-62; 1-64; 12-65; 1-66; 3-70; 11-71; 12-31-79; 12-31-81; RD 16-1987, f.
12-10-87, cert. ef. 12-31-87; RD 9-1989, f. 12-18-89, cert. ef. 12-31-89; RD
11-1990, f. 12-20-90, cert. ef. 12-31-90; RD 8-1991, f. 12-30-91, cert. ef.
12-31-91; REV 12-2004, f. 12-29-04, cert. ef. 12-31-04; REV 4-2015, f.
12-23-15, cert. ef. 1-1-16; Renumbered from 150-308.205-(A),
57-2016, f. 8-13-16, cert. ef.
15-2018, amend filed 06/26/2018, effective
Statutory/Other Authority: ORS
Statutes/Other Implemented: ORS