Capital gains tax in Oregon (2026): selling a business, real estate or farm

9.9% arrives early in Oregon

Oregon has no general capital gains rate. A long-term gain is added to your other income and taxed on the regular schedule, and that schedule is steep near the bottom: for 2026, joint filers pay 8.75% up to $250,000 of taxable income and 9.9% on everything above it; single filers reach 9.9% at $125,000 (Oregon DOR, 2026 estimated tax publication). For a seller with a seven-figure gain, nearly every dollar lands at 9.9%.

Federal tax is on top: 0%, 15% or 20% on long-term gain, with 20% above $613,700 of joint taxable income for 2026 (Rev. Proc. 2025-32). The federal capital gains guide covers it.

Worked example: why spreading the gain barely moves the Oregon bill

A joint-filing couple outside the Portland districts sells their company for a $2,000,000 gain, $200,000 of it equipment recapture. Paid in cash in 2026, the sale adds $198,000 of Oregon tax and $626,475 in total, an effective 31.3%.

• Five-year note: spreading the capital gain over 2026 to 2030 brings total tax to $520,833, but Oregon still collects $198,000. With $200,000 of other income, each year's slice still sits almost entirely above the $250,000 line (2026 schedule). The savings are federal.
• Moved to Idaho first: a genuine change of domicile before a share sale costs $534,475, which is $92,000 less, because Idaho's rate is lower.

The engine leaves out note interest and the buyer-credit side; the installment sale analysis covers both, including how a seller secures the note.

Portland: two local income taxes on the same gain

Two voter-approved taxes, administered by the City of Portland Revenue Division, reach investment income including capital gains:

• Metro Supportive Housing Services (SHS): 1% of Metro taxable income above $205,000 for joint filers and $128,000 for single filers in 2026, rising to $211,000 and $132,000 for 2027.
• Multnomah County Preschool for All (PFA): 1.5% above $200,000 joint ($125,000 single), plus another 1.5% above $400,000 joint ($250,000 single), 2026.

A Multnomah County resident inside Metro can therefore pay 4% on most of a large gain on top of 9.9%. Both taxes also reach nonresidents with income from Metro or Multnomah County sources, so selling a Portland building from out of state does not automatically avoid them (City of Portland Revenue Division, 2026).

The 5% farm rate

Oregon's one capital gains preference is for farmers. Under ORS 316.045, net long-term capital gain is taxed at 5% instead of the regular rates when all of these hold: the gain is Section 1231 gain or gain on at least a 10% interest in a farming entity; the property was predominantly used in farming (timber, apart from Christmas trees and certain hardwoods, does not count); the buyer is not related to you under IRC 267; and the sale is a substantially complete termination of your farming business or farm property. A farm dwelling or homesite you keep does not break the termination test. Our engine does not model this rate, so run a farm sale through the farmland capital gains guide and confirm the facts with your CPA.

Selling Oregon property as a nonresident

Oregon taxes nonresidents on gain from Oregon real property. At closing, the escrow agent withholds the least of 4% of the consideration, 8% of the Oregon gain, or the net proceeds, reported on Form OR-18-WC; sales of $100,000 or less and gains fully covered by the Section 121 home exclusion are exempt (OR-18-WC instructions). In an installment sale, withholding applies only to the first installment, measured on the gain reported that year. Later installments on Oregon property stay taxable by Oregon after you move away (Publication OR-17). That is one reason a move after signing a note does little for Oregon real estate; see the residency change analysis.

Estate tax at $1,000,000

Oregon's estate tax starts at a $1,000,000 taxable estate, at 10% and climbing in steps to 16% (ORS 118.010). It applies to residents and to nonresidents who own Oregon real or tangible property. For an older owner, that threshold changes the math on selling versus holding: a sale converts appreciated property into cash that is still in the estate, while holding preserves the federal basis step-up for heirs. The step-up at death analysis compares the two, and the capital gains tax by state table lists neighbors such as Washington. For a side-by-side of every option on your own sale, get the Big Sale Tax Analysis.

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