Quick answer: up to 9.9% state tax, one of the highest in the country, taxed the same as ordinary income — no discount for how long the house was held. See the full cost picture in the Oregon probate real estate sale calculator.
Ordinary income treatment, at a high top rate
The top rate arrives at a modest income level
Oregon's 9.9% top bracket starts at just $125,000 of taxable income for a single filer ($250,000 for joint filers) — an unusually low threshold for a rate this high, so many sellers with a meaningful gain reach the top bracket on at least part of it.
A distinctive federal-tax deduction softens it slightly
Oregon allows a deduction for a portion of federal income taxes paid — up to roughly $7,050 for single filers and $14,100 for joint filers — a feature shared by only a handful of states, which can modestly reduce the effective state rate on a large gain.
A separate question from the state estate tax
Oregon's $1 million estate tax applies to the estate's value at the date of death — a completely different calculation from the income tax owed later on any gain realized when the house is actually sold.
A local probate attorney can review your estate — many offer a free consultation.
The 9.9% top rate applies identically whether the sale closes in Multnomah, Washington, Clackamas, or any other Oregon county — though Portland-area residents may also owe additional local income taxes on top of the state rate.