How is the New Assessed Value (AV) determined according to the Second Test?

The New Assessed Value (AV) is determined as the lesser of the maximum assessed value or the real market value. This method ensures that property is not overvalued for tax purposes, protecting property owners from excessive increases in their property taxes due to rapidly rising market values.

In Oregon, the maximum assessed value is often capped at a certain percentage increase per year, allowing for a predictable growth in assessed value. The real market value reflects the current value of the property in the marketplace. By setting the New Assessed Value as the lesser of these two figures, Oregon's property appraisal system aims to balance fair taxation with property market fluctuations.

This approach also allows for adjustments when market conditions lead to significant changes in property values, thereby moderating the effect on taxpayers. The other options do not accurately represent the mechanism for determining the New Assessed Value within the framework established by Oregon law and thus are not applicable.