Politics
State Bill Caps Salem Home Property Tax Assessments at 3 Percent Annually
The measure limits annual assessment growth to 3 percent for owner-occupied homes in Salem while leaving rental units and commercial properties under existing rules.
How we reported this
The Oregon Legislature passed Senate Bill 892 last month, capping annual growth in assessed property values at 3 percent for owner-occupied residences in cities with populations above 150,000. Salem meets the threshold, so the change applies directly to roughly 28,000 single-family homes inside city limits.
Salem’s assessed values have risen an average of 7.8 percent each year since 2022, according to Marion County tax records. The new limit takes effect with the 2027 tax year and applies only to properties where the owner has lived for at least one year. Renters receive no direct adjustment under the bill.
Who receives the cap and who does not
Households that own and occupy their homes in the Salem city limits will see slower growth in their property tax bills. A home assessed at $320,000 this year would be capped at $329,600 next year instead of rising to an estimated $344,000 under prior trends. Apartment buildings, duplexes rented out by their owners, and commercial parcels along Commercial Street or Lancaster Drive remain outside the cap. Local advocates note that 42 percent of Salem households rent, so those residents will continue to face market-driven rent adjustments tied to higher landlord costs.
City budget documents show property taxes fund 31 percent of Salem’s general fund, which supports police, parks maintenance and street repairs. The legislation states that any revenue shortfall from the cap must be offset by the state’s new urban stabilization grant program, projected to deliver $4.2 million to Salem in the 2027-29 biennium.
Next steps for implementation
Marion County assessors will begin applying the 3 percent limit when they mail 2027 notices in October 2026. Homeowners must file a one-time occupancy affidavit by March 2027 to qualify. The Oregon Department of Revenue is scheduled to release final administrative rules by September. Policy analysts say the first full-year impact on Salem tax rolls will appear in the city’s 2028 budget forecast.