Rental Property Taxes in Oregon (2026 Guide)

1. Property Tax: Measures 5 and 50

Oregon does not tax rentals at a different rate than owner-occupied homes — there is no rental assessment penalty. Instead, two constitutional measures hold property taxes down for everyone:

• Measure 50 gives each property a Maximum Assessed Value (MAV) that can rise no more than 3% per year (barring new construction, additions, or rezoning). Your tax is based on the lower of MAV or real market value — so assessed value typically lags market value substantially.
• Measure 5 caps the total rate at $15 per $1,000 of real market value — $10 for general government and $5 for education — outside of voter-approved bonds.

Because MAV growth is capped at 3% while market values often climb faster, a long-held rental can carry an assessed value well below what it would sell for. Statewide, effective property-tax rates average roughly 0.9% of real market value, though the figure varies widely by county and taxing district.

2. Income Tax (Top Rate 9.9%)

Oregon levies a graduated income tax — among the nation’s highest — and there is no sales tax to offset it:

• 4.75% / 6.75% / 8.75% / 9.90% — the top marginal rate of 9.9% applies to taxable income above roughly $125,000 (single) or $250,000 (married filing jointly).
• Oregon starts from federal taxable income and applies its own additions, subtractions, and credits.
• Net rental income flows through to your Oregon return and is taxed at these ordinary rates — Oregon has no separate, lower rate for rental or investment income.

3. Capital Gains: Taxed as Ordinary Income

Oregon has no preferential capital-gains rate. A long-term gain on the sale of a rental is taxed at the same graduated rates as ordinary income — up to 9.9% — unlike the federal system’s 0/15/20% schedule. Combined with depreciation recapture, a disposition in a high-tax state like Oregon deserves careful modeling before you sell.

4. Bonus Depreciation: Oregon Conforms

Oregon is a rolling-conformity state for the definition of taxable income: ORS 317.010(7) (and ORS 314.011) tie the Internal Revenue Code as applicable to the current tax year for income purposes. As a result, Oregon generally conforms to federal bonus depreciation under §168(k) — the bonus you take federally flows through to your Oregon return with no add-back, so your federal and Oregon depreciation usually match.

5. No Real-Estate Transfer Tax

Oregon is one of the few states with no statewide real-estate transfer tax, and state law actively blocks new ones. ORS 306.815 prohibits any city, county, or district from imposing a tax on the transfer of real property.

The sole exception is Washington County, whose $1 per $1,000 (0.1%) transfer tax was grandfathered because it was in effect on March 31, 1997 (ORS 306.815(4)). No other jurisdiction in Oregon can levy one. For a rental anywhere outside Washington County, transfer tax is simply not a cost of doing a deal.

6. LLC Annual Report ($100/Year)

A domestic Oregon LLC must file an annual report with the Secretary of State and pay a $100 fee, due each year on the anniversary of the LLC’s registration. The Secretary of State mails a renewal reminder to your registered agent roughly 45 days before the due date; missing it eventually leads to administrative dissolution.

7. Statewide Rent Control (SB 608 / SB 611)

Oregon was the first state to enact statewide rent control (SB 608, 2019; tightened by SB 611, 2023). The cap is set in ORS 90.323 / 90.600 and applies to most residential tenancies across the entire state:

• Annual increases are capped at 7% plus CPI, with a hard ceiling. SB 611 lowered the ceiling so the cap is the lesser of that figure or 10%.
• The Department of Administrative Services publishes the maximum each September. For 2026 the maximum is 9.5% for most units (a separate 6% cap applies to certain larger manufactured-home facilities).
• Increases are limited to once every 12 months, and the required notice must state the percentage and the applicable cap.

8. Security Deposit Rules

• No statutory cap on the deposit amount (ORS 90.300).
• Return within 31 days of the tenancy ending and the tenant delivering possession, together with a written itemized statement of any deductions.
• Deductions are allowed for unpaid rent, damage beyond ordinary wear and tear, and cleaning to restore move-in condition. Failing to comply can expose you to up to twice the deposit in tenant damages, so document the itemization carefully.

9. How SheltrIQ Helps Oregon Landlords

Oregon stacks a high income tax on top of strict rent rules — SheltrIQ keeps the tax side precise so you can focus on the rest:

• Graduated income modeling — applies the exact 4.75% / 6.75% / 8.75% / 9.90% brackets to your net rental income from a federal-taxable-income base.
• Disposition modeling — taxes a rental sale at Oregon’s ordinary rates (up to 9.9%) with depreciation recapture, so the sale’s true state cost is clear before you sell.
• Bonus-depreciation tracking — applies Oregon’s §168(k) conformity so federal and Oregon depreciation stay aligned, flagging only legacy 2009–10 Schedule OR-DEPR differences.
• AI Schedule E classification — sorts each expense to the right line so your Oregon return starts from an accurate federal return.