Politics & Government
Lake Oswego City Council Closes $15K Tax Loophole For Developers
The city closed a loophole that let developers escape paying a $15,000 demolition tax.
LAKE OSWEGO, OR — The Lake Oswego City Council closed a loophole that was allowing developers to escape a $15,000 tax and avoid certain notice requirements.
The council this week adopted a rule changing the definition of "demolition."
The city changed a rule that allowed developers to designate a demolition as a remodel if a project kept one exterior wall, allowing them to avoid paying a $15,000 demolition tax that the city enacted in 2019.
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The old rule also allowed developers to avoid having to send out notices to neighbors that are required with a demolition.
The change updated the rule to require developers to leave at least 50 percent of exterior walls in order for a project to be considered a remodel rather than a demolition.
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Council staff examined 390 permits that had been issued during 2021. Of those, 29 would have been considered demolitions under the new definition.
The council said that it will return to the issue in two years to determine whether or not the change has been effective.
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