Property tax exemption program for low-income housing held by charitable, nonprofit organizations.

The Oregon legislature authorizes a property tax exemption for low-income housing held by charitable, nonprofit organizations. The tax exemption is intended to benefit low-income persons (individuals earning 60% or less of the area median income) and is available for qualifying property located in the City of Salem. Specific provisions that govern the City of Salem’s Nonprofit Corporation Low-income Tax Exemption Program are provided in the Salem Revised Code Sec. 2.850 to 2.910.

2025 property tax exemption applications are due no later than 4:00 p.m. on Friday, September 29, 2023.

Application Guidelines

• Charitable, nonprofit organizations that provide housing to low-income persons are eligible.
• The organization must be certified by the Internal Revenue Services as a 501(c)(3) or 501(c)(4) (ORS 307.180).
• Organizations must own or have a leasehold interest in the property. In addition, your nonprofit organization can qualify if it participates as the general partner in a limited partnership who owns the property, so long as the nonprofit organization is responsible for the day-to-day management of the property. In this case, the limited partnership must be listed as the owner.
• The site must be able to show that it will be occupied during the eligible tax year by income-eligible households.
• Vacant land intended to be developed as low-income housing is eligible for the exemption provided under this program. The maximum period for this exemption is 2 years.
• Applicants who are leaseholders must have a signed leasehold agreement by the application deadline.
• Applications for new exemptions and renewal of existing exemptions must be made annually. Any renewal application for a property that has been previously exempted from taxation will be evaluated on criteria used to grant the original exemption.
• The application for tax exemption is for property that is, or will be, owned or leased from July 1 through June 30 of the year for which the tax exemption is requested. If the property changes ownership between July 1 and June 30 of the year for which the tax exemption is requested, the applicant must notify the City of Salem of the change in the status so that the continuing eligibility of the property can be evaluated.
• Only the residential portion of property that is used to house low income people or property that is being held for future development as low-income housing. For example, the commercial space in a mixed-use building would not be eligible for the exemption.
• Property may qualify for exemption under this program when governing bodies and service districts representing 51% of the taxes levied on the property have formally agreed to the exemption.