What happens to MAV during a declining market?

In Oregon, the Maximum Assessed Value (MAV) is a crucial component of the property tax assessment system. During a declining market, the MAV typically remains constant and does not change immediately. This is because the MAV is designed to protect property owners from sharp increases in assessed value, allowing for a more stable tax environment.

MAV is determined by a formula that considers the prior year's assessed value, and it can only increase by a specific percentage each year, typically around three percent. In a declining market, even if the market value of properties decreases, the MAV does not automatically adjust downwards. Instead, it remains "frozen" until the property is sold or undergoes significant changes, at which point reassessment can occur, tying it back to the current market conditions.

This is important for property owners as it provides a level of protection from immediate tax increases due to fluctuations in the market while ensuring that any potential changes to MAV align with stable growth expectations set by legislation. Thus, even in a declining market, property owners may not see an immediate reduction in their MAV.