January 1, 2008 House Bill 2592 will go into effect. What does this mean? For the out of state seller it means less money in the short run. If an out of state seller sells an Oregon property after January 1, 2008 new legislation will require a mandatory withholding for income taxes.
The withholding will be from the seller's proceeds at the time of closing. The 2008 sales agreement will have text that pertains to this and the new law.
What to expect - from looking over the bill which can be viewed at http://www.leg.state.or.us/07reg/measpdf/hb2500.dir/hb2592.intro.pdf I see it as you should expect to have 4% of the net proceeds or 10% of the gain for taxable income. Obviously it is much more detailed than this, please do read the bill so you know exactly what to expect regarding your own sales in Oregon.
This law is over a year old now and it still poses a lot of questions - the one thing that both REALTORS® and Title and Escrow have to continue to explain is that this is a withholding and not a tax.
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