A 1031 exchange in Oregon lets you sell investment real estate and reinvest in like-kind property while deferring the tax on the gain. The federal rules apply the same way everywhere. Oregon adds three things worth knowing: a high state tax on the gain, a nonresident withholding step at closing, and a clawback that keeps Oregon's claim on the gain alive even after you exchange into another state. We act as your qualified intermediary, holding the proceeds and handling the documentation so the exchange holds from sale to closing.
Table of contents
- How much is capital gains tax on real estate in Oregon?
- Oregon's nonresident withholding
- The Oregon clawback
- Oregon 1031 exchange rules and timeline
- 1031 exchanges across Oregon markets
- Common Oregon 1031 exchange mistakes
- Start your Oregon 1031 exchange
- Frequently asked questions
How much is capital gains tax on real estate in Oregon?
Oregon taxes the gain as ordinary income, with a top rate of 9.9%, among the highest in the country, and Oregon has no sales tax, so the state leans heavily on income tax. The 9.9% is on top of the federal tax an exchange also defers:
- Long-term capital gains at 0%, 15%, or 20%, with the 20% rate applying above $545,500 of taxable income for single filers and $613,700 for married couples filing jointly in 2026.
- The 3.8% Net Investment Income Tax above $200,000 of modified adjusted gross income for single filers, $250,000 for married couples.
- Depreciation recapture, taxed as unrecaptured Section 1250 gain at up to 25%.
- Oregon's rate of up to 9.9% on the gain.
Oregon conforms to Section 1031, so a properly structured exchange defers both the federal and the Oregon tax. The full federal framework is in our main 1031 exchange guide; this page focuses on Oregon.
Oregon's nonresident withholding
When a nonresident sells Oregon real estate, the closing agent withholds the smaller of 4% of the consideration or 8% of the net gain, reported on Form WC. It is a prepayment against the Oregon tax, not an extra tax, but it pulls cash at the table. In a 1031 exchange you avoid the withholding by certifying that the transaction is a like-kind exchange in which the gain is not recognized, supported by your intermediary's documentation. If the certification is not in place, the withholding is collected and then recovered on your Oregon return.
The Oregon clawback
Oregon is one of only four states, with California, Massachusetts, and Montana, that applies a clawback to 1031 exchanges. When you sell Oregon property, exchange into replacement property in another state, and later sell that replacement property in a taxable transaction, Oregon expects to tax the gain that accrued while the property was in Oregon, even if you have since moved. The deferral works at the time of the exchange, but Oregon does not simply release its claim on the Oregon-source gain. Plan for this with your tax advisor if you intend to reinvest outside the state, and keep your records aligned so the deferred Oregon gain is tracked correctly.
Oregon 1031 exchange rules and timeline
The federal deadlines govern, and they are strict:
- 45-day identification. Identify replacement property in writing within 45 days of the sale.
- 180-day closing. Close within 180 days of the sale, or by your return due date including extensions, whichever is earlier.
- No constructive receipt. Proceeds go to your qualified intermediary, never to you.
- Equal or greater value and debt. Reinvest all net proceeds and match or exceed the relinquished value and debt, or the shortfall is taxable boot.
- Same taxpayer. The entity that sold must be the entity that buys.
1031 exchanges across Oregon markets
Portland and its metro carry most of Oregon's exchange volume, in multifamily, commercial, and industrial property. Two statewide factors shape replacement-property strategy here. First, Oregon has statewide rent control, the first in the nation, which caps annual rent increases and directly affects multifamily underwriting, so model the allowable increase rather than market rent growth. Second, under Measure 50 the property's maximum assessed value generally grows by no more than 3% a year and is not fully reset to market on a sale, which is unusually favorable and worth confirming for any replacement property. Beyond Portland, Bend has been one of the fastest-growing markets in the state, with strong appreciation and short-term rental demand, and Eugene, Salem, and the southern Oregon markets around Medford add further multifamily and commercial activity.
Common Oregon 1031 exchange mistakes
- Not certifying the exchange on Form WC, so the nonresident withholding is collected and tied up.
- Overlooking the Oregon clawback and assuming a move out of state ends Oregon's claim on the gain.
- Underwriting multifamily on market rent growth rather than the rent-control cap.
- Taking receipt of the proceeds, or missing the 45-day identification window.
Start your Oregon 1031 exchange
Set up your exchange before your relinquished property closes, so the Form WC certification is in place and the proceeds never reach your hands. Contact our team to begin, or to talk through a specific deal.
Frequently asked questions
How much is capital gains tax on real estate in Oregon?
Oregon taxes the gain as ordinary income at up to 9.9%, on top of federal capital gains tax. Oregon has no sales tax.
Is there nonresident withholding when I sell Oregon property?
Yes. The closing agent withholds the lesser of 4% of the consideration or 8% of the net gain on Form WC. In a 1031 you certify no recognized gain to avoid it.
Does Oregon have a 1031 clawback?
Yes. Oregon is one of four clawback states. If you exchange Oregon property into another state and later sell the replacement in a taxable transaction, Oregon taxes the gain that accrued in Oregon.
Do I need a qualified intermediary for an Oregon 1031 exchange?
Yes. The intermediary must hold the proceeds and facilitate the exchange, and supports the Form WC certification. Engage one before the relinquished property closes.
This page is general information, not tax or legal advice. We act as a qualified intermediary and do not provide tax or legal advice. State and federal rules and thresholds change; confirm current figures with your tax advisor.
