Opinion ID: 3218859
Heading Depth: 3
Heading Rank: 1

Heading: Real market value

Text: The real market value of property is the starting point for determining the amount of property tax. See ORS 308.232 (unless property is exempt from ad valorem taxation, it should “be valued at 100 percent of its real market value”).2 “Real market value” is defined as essentially what a hypothetical buyer would pay to a hypothetical seller in an arm’s length transaction. See ORS 308.205(1) (defining real market value); 3 Hewlett-Packard Co. v. Benton County Assessor, 357 Or 598, 602, 356 P3d 70 (2015).4 The real market value is derived from the “highest and best use” of the property, because the highest sale price would come from a buyer who intended to use the property in the most profitable way.5 2 Unless otherwise noted, all references to statutes or rules are to the versions in effect on the assessment date for this particular property: January 1, 2008. 3 ORS 308.205(1) provides: “Real market value of all property, real and personal, means the amount in cash that could reasonably be expected to be paid by an informed buyer to an informed seller, each acting without compulsion in an arm’s-length transaction occurring as of the assessment date for the tax year.” 4 Hewlett-Packard Co. dealt with industrial property and relied on different regulations. Nevertheless, the regulations applicable here show that the same general principles apply. 5 “Highest and best use” means “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, and financially 826 Dept. of Rev. v. River’s Edge Investments, LLC