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6 percent interest

ORS 311.674(3)


Deferral accounts accrue interest at the rate of 6 percent. Interest continues to accrue each year on the deferred tax amounts paid to the county.


In 2011 the Oregon Legislature changed the way interest is applied to property tax deferral accounts. Deferred taxes paid prior to the 2011 change are calculated as simple interest; deferred taxes paid for 2011 forward are calculated as compound interest.

Simple vs. Compound
 
Simple interest is different from compound interest. Simple interest means that the interest computes yearly against the deferred tax amounts. Compound interest means interest is computed using both the amount charged (deferred taxes) and previous unpaid interest.
 
If you compare 6 percent simple interest to 6 percent compound interest, the simple interest you pay would be nearly the same in the first year or two. After a few years, the compound interest will grow faster and be significantly more.
 
For example, the table below shows deferred property taxes, with both simple interest and compound interest accruing over several years.
 

Senior/Disabled Programs:

simple-vs-compount.png

Special Assessment Program: 

Accounts in the Special Assessment program earn interest at 6 percent. Interest is applied as shown in the table below.

Payment Date
Installment Amount Paid
Deferred Installment Running Balance
6% Interest Accrual
February 2011 
$300
$300
$9
August 2011 
$300
$600 ($300 + $300)
$18
February 2012 
$300
$900 ($600 + $300)
$27
August 2012 
$300
$1,200 ($900 + $300)
$36
February 2013 
$300
$1,500 ($1,200 + $300)
$45
August 2013 
$300
$1,800 ($1,500 + $300)
$54
February 2014 
$300
$2,100 ($1,800 + $300)
$63
August 2014 
$300
$2,400 ($2,100 + $300)
$72
February 2015 
$300
$2,700 ($2,400 + $300)
$81
August 2015 
$300
$3,000 ($2,700 +$300)
$90
 Total amount owed = $3,000
 $495
 
NOTE: The Special Assessment program is no longer accepting new applications.