Some properties in Oregon are considered “historic” because they were famous buildings, famous locations, or are the final resting place of a famous object or sculpture. For example, the USS Blueback submarine at OMSI in Portland is on the National Historic Register, as are Fort Clatsop and University of Oregon’s Knight Library. In some cases, properties may be considered historic, but just haven’t had national recognition yet.
On the Oregon State Parks website, you can find the Oregon Historic Sites database. The Oregon historic sites are at times surprising: drainage ditches on Highway 26; meteorite sites in West Linn; a meadow in Harney County; totem poles in John Day; Fire Hydrants in Granite; the state has a wide array of historic places.
Oregon allows owners of some historic properties to apply for a special tax assessment. Under ORS 358.480(11), the eligible historic property is either (1) on the National Register of Historic Places, or (2) some place the State Historic Preservation Officer believes could be listed on the National Register. The special tax assessment allows the homeowner to freeze the assessed value of the property for up to 10 years at a time (maximum potential freeze of 20 years) while the homeowner does preservation and repair work to the property [this is in addition to the 20% Rehabilitation Tax Credit offered by the federal government]. Depending on how much renovation and restoration the owner is doing, this assessed value freeze can result in significant tax savings for the owner.
If a homeowner does apply for the special assessment, they will have a “Preservation Plan” that they must follow. During the first five years of the special assessment, the plan will require the homeowner to put a certain amount of effort and money into rehabilitating the property and preserving the historic condition. If the homeowner does something that disqualifies the property from its historic classification or special assessment, such as destroying the property or failing to preserve the historic property [e.g. trading out the historic façade with modern composite materials], the special assessment will be lost, and the owner at the time will have to pay back any benefit from the special assessment accrued over the last 10 years, plus 15% more. This means an unsuspecting Buyer of historic property may find themselves paying several thousand dollars in surprise taxes if the Buyer is not informed about the historic property or preservation plan.
Form 4.3 will provide all necessary disclosures and information to avoid these costly mistakes, and has a provision for how the parties plan to pay for the fees if a special assessment disqualification occurs.