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Flashcards in Unit F Law - Oregon Liens Deck (40)
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1
Q

Homestead Exemption

A

Homeowners in Oregon State are offered some protection against the forced sale of their personal residence from judgment liens through the Oregon Homestead Exemption.

  • strictly for general liens NOT specific, i.e It does not protect against foreclosures that arise out of real property taxes, mechanic’s lien, mortgage defaults, deeds of trust, or other specific liens.
2
Q

To qualify for the Oregon Homestead Exemption, one:

A

a) Must be the residence of the debtor, their spouse/registered domestic partner, parent, or children
b) The property must not be larger than one city block for city properties
c) The property must not be larger than 160 acres for farm or rural properties

Example: Mr. Brown owns a home that he has never lived in, but his mom and sister do. This residence is covered by the homestead exemption as long as Mr. Brown does not establish another homestead elsewhere.

Example: Mr. Smith is separated from his wife and is living at his parents’ house while Mrs. Smith is living in their home. He hopes to reconcile with his wife. The house continues to be their homestead as long as Mr. or Mrs. Smith continue to live there.

3
Q

Situations where the homestead exemption could be lost or not apply:

A

Situations where the exemption could be lost or not apply might be if they own other real property that is not his/her residence, or if they are absent from the property for over a year due to:

a) The sale of the property
b) Result of foreclosure
c) Leasing of the property to another party
d) Abandonment of the property

4
Q

Homestead exemption amounts in Oregon

A

$40 k individual

$50 k married couple

5
Q

Homestead and proceeds from the sale of the property

A

The exemption would apply to proceeds of a sale, so long as the proceeds were used to purchase another residence within the year following the sale. The exemption would be lost however if the debtor were to sell their home and reinvest the proceeds in anything else, such as in a foreign business.

  • must notify judgments creditor of sale
  • proceeds or gains above exemption will go to creditor
6
Q

What does the homestead exemption apply to?

A

Applicability of the Exemption

The exemption applies to:

Single family homes
Manufactured homes
Condominiums
Floating homes
Land to which the above are attached
A residential lease if the lease was prepaid
7
Q

homestead example

A

Example: Mr. Jones caused an auto accident and injured Mrs. Carter. After Mr. Jones’ insurance company paid out $200,000, there was still a judgment lien against him from the case for $80,000.

Mr. Jones had a residence worth $245,000 with a deed of trust in the amount of $210,000, and since Mr. Jones did not have enough equity in his home above the exemption amount of $40,000, Mrs. Carter could not foreclose on his home. Should Mr. Jones’ equity position change in the future due to appreciation of the property, Mrs. Carter may be able to foreclosure if the equity becomes above the exemption limit.

8
Q

General taxes (Property tax)

A

are levied on property to finance the services of government. Public services such as libraries, public schools, or fire and police protection are examples of the services that are supported by general taxes.

  • major source for local gov vs state
  • ad valorem
9
Q

ad valorem

A

taxes which means that that they are taxed according to value

10
Q

Real Property General Taxes

A

type of lien which affects almost all real property.
**If the tax is not paid, the lien for general taxes takes priority over all other liens. This is true even if the other liens were recorded prior to the tax lien.

11
Q

Income taxes

A

are the major source of income for the government at both the federal level and within Oregon state

12
Q

taxes imposed on property is based on two factors:

A

the assessed value of the property and the tax rate. The annual property tax is the value of the property as determined by the county tax assessor, multiplied by the tax rate.

13
Q

property tax, 1 mill

A

is equal to $1 in property tax, which is levied per $1,000 of a property’s determined taxable value.

-Tax levy amount divided by taxable assessed value = tax rate $225,000 divided by $39,487,000 = .0056980 x 1000, or = $5.6980 per $1,000 of assessed value

14
Q

property tax rate

A

for each taxing district is determined by dividing the district’s need for the amount of money needed to be raised from property tax by the total amount of assessed value of the properties in that district.

  • placed on the tax roll in the form of a rate per $1,000 of assessed value
15
Q

Assessment/Fair market value

A
  • administered by local governments
  • In Oregon, all property is subject to taxation, unless it is specifically exempt.
  • Fair market value is the price a buyer will pay and a seller will accept for a property under reasonable and ordinary conditions.
16
Q

Fair market value is also important in real estate for a number of other reasons:

A

A home is being priced for sale
A property is involved in a divorce settlement
The home is tied up in an estate
Eminent domain is being exercised by the government
A home is being re-financed

17
Q

Tax Amount

To calculate the property tax amount, one would multiply the total tax rate by the assessed value.

A

Assessed value = tax rate x assessed value

Example: If a property is assessed at $500,000 and the tax rate is $15 divided by 1,000 of assessed value, the formula is Tax = Tax Rate times Assessed Value. $500,000 times .015 = $7,500. The tax is $7,500

(15/1000) x 500,000 = 7,500

18
Q

Property tax Appeals

A

If an owner of real property believes the assessed value placed on their property by the county assessor is too high, they may appeal the assessment.

  • In an appeal, the burden of proof for valuation of his property rests on the taxpayer and not on the assessor.
  • If they are still not satisfied with the property tax assessment, the taxpayer may file an appeal to the county board of property tax appeals by December 31.
19
Q

Property tax exemptions/reductions

A

Properties owned by the government
Nonprofit groups
Religious groups

Some properties qualify for reduced valuation of tax for certain property owners or property uses. These might include:

Veteran’s property tax exemptions
Farmland
Forest land
Residential property located in an area that is zoned for industrial or commercial use

20
Q

veteran’s property tax exemption

A

Qualifications
To qualify for a veteran’s property tax exemption:

a) A veteran must reside on the property
b) The veteran or the veteran’s spouse must own the title, although they do not need to own the property free and clear of liens
c) The veteran must have been honorably discharged
d) The veteran must have served either 90 consecutive days during wartime prior to February 1, 1955, or 210 consecutive days after that date, unless discharged sooner because of a service-related injury or illness
e) The veteran must also be certified as being at least 40% disabled. If the disability is not service related the veteran must have income below set limits, and the exemption is for a lower amount than if the disability was service related. The veteran must apply for the exemption by April 1st each year in order to claim the exemption for the next coming tax year.

21
Q

Farmland exemption of property tax

A

Farmland used primarily to make a profit from farming may be assessed based on its agricultural value rather than its value at highest and best use.

If the property is located in an exclusive farm-use zone, this farmland is automatically assessed as farmland until one of the following occurs:

It is no longer used as farmland
The owner makes a request for a zone change
The owner builds a dwelling that is considered a non-farm dwelling

If located outside of an exclusive farm use zone, the land is specially assessed only if:

The owner applies for the assessment
The property has been used for farming for the past two years, and
The property has produced between $550 and $3,000 per year of gross income for three of the past 5 years

22
Q

Forest Land property tax

A

Owners of forest land may also apply to have their land assessed at its value for forest use instead its market value. These owners however are subject to a special tax if/when timber is harvested from the land. This is referred to as a SEVERANCE TAX.

23
Q

Residences in Commercial Areas property tax

A

If the property is occupied by the owner, it may be assessed at the value for residential use rather than at its highest and best use.

24
Q

Manufactured Homes Property tax

A

A manufactured home used as a residence, business, or commercial or office purposes is assessed as personal property when the land under it is owned by someone other than the owner of the manufactured home. A manufactured home would be considered real property for purposes of property taxes when it is on land owned by the owner of the manufactured home.

25
Q

Property Tax Due Dates

A

The property tax year starts on July 1st, and continues through the following June 30 of the next year.

  • When the property is sold, the buyer and seller will prorate their share of the tax bill.
  • The seller will be responsible for the amount of taxes from July 1 up to the day the sale closes
26
Q

When are property taxes due?

A

November 15th (can pay in installments)

27
Q

Personal Property Taxes

A

Personal property taxes become overdue the day after each trimester’s cutoffs; November 16th, February 16th, or May 16th respectively. If not paid by the date shown on the delinquency notice the tax collector may issue a warrant creating a judgment against the taxpayer, or may seize and sell the personal property.

28
Q

Tax Foreclosure

A

Tax foreclosure of real property can occur three years after the earliest delinquency date; Prior to this, the taxpayer will have been given notice. Delinquent taxes that are owed and the year the taxes are subject to foreclosure are shown on the delinquency notice sent out when taxes first become delinquent.

29
Q

Foreclosure procedures

A
  1. A list of all properties subject to foreclosure is prepared in July of each year for accounts with property taxes three years delinquent. Lien holders may ask to be notified if a certain property is subject to foreclosure.
  2. One month after the foreclosure list is prepared, the district attorney applies for a judgment and decree through the circuit court. The foreclosure list is published the same day. Notice of the foreclosure is run in a newspaper of general circulation in the county. Notice of foreclosure may be made by personal service.
  3. A judgment and decree is secured from the circuit court not less than 30 days after the application for judgment and decree. After that, you have two years to redeem property. Only the following can redeem property: (l) a person with an interest in the property at the date of judgment and decree, (2) an heir or devisee of a person with an interest in the property, (3) a holder of a lien of record on the property, such as a mortgage company, and (4) a municipal corporation with a lien on the property, such as a city or sewer district.
  4. All persons with a legally recorded interest in the property are notified by both regular and certified mail that the period of redemption will end. The tax collector is responsible for providing this notice. The notification is to be made not less than one year before the expiration of the redemption period.
  5. A “Notice of Expiration of Redemption Period” is published in two weekly issues of a newspaper. This occurs not more than 30 days nor less than 10 days before the expiration of the redemption period.
  6. The tax collector deeds the property to the county at the end of the redemption period. All taxes are canceled and the property is removed from the tax roll. Within certain limits, the county is free to sell the property to the former owner at a private sale.
30
Q

Taxpayer’s course of action if they are being foreclosed on

A
  1. Your property can be removed from the foreclosure list before publication if you pay the full tax and interest for the year(s) causing foreclosure. Interest is 1.3% per month.
  2. After the foreclosure list is given to the newspaper for publication, you can remove your property from the foreclosure list by paying the full tax and interest for the year(s) causing foreclosure and a penalty of 5% of the total tax and interest owed on the property.
  3. If you believe the property should not be included in the foreclosure process, you must file your reasons with the court within 30 days after the publication.
  4. Once judgment and decree is granted by the circuit court the two-year redemption period commences.
    - You keep title to your property up to the time the tax collector deeds the property to the county. If you damage or destroy the property in any way during the period of redemption, you lose your rights to own the property.
    - You have lost all rights to the property after the tax collector deeds the property to the county.
31
Q

Foreclosure Redemption Period

A

Unlike other foreclosures, during the redemption period following a property tax foreclosure the delinquent taxpayer has the right of possession to the property. They can continue to reside in or retain possession of the property as long as they do not damage or destroy the property.

32
Q

Tax Deferral

Disaster Area Deferral - ORS 311.745 Eligibility

A

the taxpayer who has land situated in a disaster area and whose land is adversely affected by the disaster area may, on or before September 1st of each year, elect to defer the taxes levied on the land of the taxpayer for that year.

33
Q

Disaster deferral qualifications

A

) The property must be located in a disaster area

b) If the taxpayer is not the owner of the land, the taxpayer shall obtain written approval from the owner of the land to defer the taxes on the land under
c) Property must be land as defined in ORS 311.740 (Definitions for ORS 311.740 to 311.780)

34
Q

Disaster deferral payment

A

When the area in which the land is located ceases to become a disaster area, the deferred taxes will be due and payable as follows:

a) One-fifth (20 percent) of the deferred taxes shall be payable on or before November 15 of the year following the close of the calendar year
b) Interest shall accrue against the unpaid taxes and shall be paid with each one-fifth payment for the period of time
c) The amounts designated in subsections (1) and (2) of this section shall be paid directly to the Department of Revenue on or before November 15 of each year in which they are due.
d) If the amounts falling due as provided in this section are not paid on the indicated due date, such amounts shall be deemed delinquent as of that date and the property shall be subject to foreclosure as provided in ORS 311.771 (Liens).
e) All moneys collected by the department pursuant to this section shall be deposited into the General Fund.

35
Q

Recordation of Tax Deferred Properties & Recording Constitutes Notice of Lien

A

a) On its approval of an application to defer taxes on land, the Department of Revenue shall record in each county in which there is tax deferred property
b) The recording of the tax deferred properties under subsection (1) of this section gives notice that the department claims a lien against those properties in the amount of the deferred taxes plus interest, even though the amount of taxes or interest is not listed

36
Q

Oregon Property Tax Deferral for Disabled and Senior Citizens

A

How does the program work?

If you qualify for the program, the Oregon Department of Revenue (DOR) will make the property tax payment to the county on November 15. Also:

  • Interest at 6 percent on the taxes is deferred (see page 3), and
  • A lien will be placed on your property (see page 2), and
  • On manufactured structures, a $55 fee will be charged to your account for DOR to become a security interest holder, and
  • The cost of recording the lien and the manufactured structure fee will be deferred, and
  • All payments, plus interest and fees must be repaid.

Heirs will have to pay in full when person dies

37
Q

How do disabled citizens apply?

A

Disabled Citizens: On or before April 15 of the year you file the application:

  • At least one joint property owner needs to qualify as an individual with disabilities.
  • You must be determined eligible to receive or be receiving federal Social Security disability benefits due to disability or blindness.
38
Q

How do senior citizens apply?

A

Senior Citizens: On April 15 of the year you file the application:

  • If you are married and apply jointly with your spouse or registered domestic partner (RDP), you both must be 62 years old or older; if only one applicant is 62, you must apply as an individual.
  • All joint property owners, other than spouse/RDP, must be age 62.

*Domestic partnerships are valid

39
Q

Oregon Property Tax Deferral for Disabled and Senior Citizens

A

http://www.oregon.gov/DOR/SCD

40
Q

When are taxes due from deferral programs?

A

When you sell the property or it changes ownership. Example: You deed your property to your children.
When you move permanently from the property, unless it’s because of medical reasons
When the applicant dies
The property is moved out of state (manufactured structures or floating homes)