Property Tax

​About the program​

The 1999 Legislature established the forestland program as a special tax assessment. Landowners in this program have a reduced property tax assessment that’s intended to recognize the importance of forestland to Oregon's economy and respond to the growing pressures that urban growth was putting on natural resource lands. Information specific to the Western Oregon Forestland Program is located in ORS 321.257-390, and ORS 321.805.855 contains information specific to the Eastern Oregon Forestland Program. 

How the program works

During the 1900s, counties identified lands in the state whose best, most economically-productive use was to grow timber and other forest products. The counties refer to these lands as "highest and best-use (HBU) forestlands." Landowners who own forestland that the county doesn’t consider "highest and best use" can apply to the county assessor to have the land designated as forestland (DFL forestland).

Forestland classified as "highest and best use" and "designated" qualifies for special assessment under the forestland program. The land is assessed at a special rate based on the typical price paid for land managed for the production of harvestable timber. This value is often less than the real market value used for taxing other properties.

Choosing a program

Several factors influence whether you should remain in the Forestland Program or choose the STF Program.

​ ​Greater Tax Savings With STF Less Tax Savings with STF
Productivity class - Western Oregon onlyHigh productivity Low productivity
Property tax rate Higher tax rateLower tax rate
Management intensityLower intensityHigher intensity
Rotation ageShorter rotation ageLonger rotation age
Opportunity investment
of delayed tax
Investment at a high rate No investment
Harvest timing​Delayed harvest​Harvest now
Projected length of property ownership​More than 10 years​Immediate sale

Pros and cons of the STF Program:

​Advantages​Disadvantages
Times property tax payments with cash flows from harvest. If substantial amounts of timber (above sustained yield amounts) are harvested early on, may pay more severance tax at harvest than would be due on an annual basis under the forestland program.
Pay annual property taxes based on 20 percent of  forestland values. Severance tax rate assumes average growth on an average stand in Western and Eastern Oregon.
Simplified method of computing severance tax at harvest based on volume sold. Election is irrevocable. Once made, it can only be changed by selling or transferring the property or changing it to a non-forestry use.
Severance tax paid only on sawmill grades and better.If property is sold or transferred and the new owner does not elect to continue in the STF program, additional taxes of up to 10 years of amounts deferred under the STF program may be due.
No severance tax on substandard grades (i.e., utility and special cull).Must place all contiguous tax lots in this program.
Growth in future severance tax rates tied to growth in underlying property tax values.Severance tax returns need to be filed for harvests from STF lands.
Severance tax rate assumes average growth on an average stand in Western and Eastern Oregon.
Can elect to place noncontiguous tax lots in different tax programs.
New owners and transferees (within 30 days of notice from the county) can choose to remain in the STF program without paying rollback of back taxes.
Can choose the STF program at any time. The application is due by April 1 of any year to be effective for that year and all future years.

How to get into the Designated (DFL) Forestland Program

If your land has not already been designated as highest and best use (HBU) forestland, and you wish to get into the designated forestland program, apply to the assessor of the county in which the forestland is located. The application is needed to help the assessor determine if your land qualifies.

To qualify for the program, the area to be designated must be at least two contiguous acres with the same ownership.

The land must contain enough trees to meet the stocking standards of the Oregon Forest Practices Act. If your land doesn’t currently meet these standards, you can still qualify if at least 20 percent (minimum two acres) of the land meets the standards by the end of the first calendar year in the program and there’s a written management plan to plant enough trees to meet the standards within five years. Lands that aren’t adequately stocked within five years will be disqualified.

Disqualification from DFL/STF or removal from HBU classification

The county assessor may disqualify DFL/STF lands that do not continue to meet the standards for this program. The owner of the disqualified lands will be required to pay an additional tax. This additional tax will be the difference between the tax paid for the previous five years and the tax that would have been paid for the same five-year period had the land been taxed at the real market value.

HBU land declassification

HBU land may be declassified to another land class by the assessor. You may be able to qualify for another special assessment program in the event you are disqualified. Contact your county assessor​ for options.