Which of the following is an exception to the MAV 3% limit?

The correct answer is based on the principle that the maximum assessed value (MAV) in Oregon is subject to a 3% limit on annual increases. However, new properties or improvements to existing properties are exceptions to this limit. When a new property is constructed or existing property undergoes significant improvements, it is assessed based on its market value rather than the capped MAV. This means that these types of properties can experience valuation increases that exceed the regular 3% cap, reflecting their actual market worth.

This policy encourage development and improvements by allowing property owners to realize the full market value of their new or upgraded properties without the constraints of the MAV limit. Other options do not provide a similar exception to the MAV 3% rule, as they relate to market duration, property size, or classification, which do not influence the MAV calculation in the same way as new construction or substantial improvements.