What Is a Special Assessment Tax?

A special assessment tax is a surtax levied♛ on property owners to pay for specific local infrastructure projects such as the construction or maintenance of roa🅠ds or sewer lines. The tax is charged only to the owners of property in the neighborhood that will benefit from the project. That neighborhood is called the special assessment district.

澳洲幸运5官方开奖结果体彩网:Prospective homebuyers should be aware of any special assessment𒉰 tax on a property they are considering. Special assessments may be levied for a pre-set number of years, and they are often not tax-deducti🐠ble.

Like 澳洲幸运5官方开奖结果体彩网:property taxes, special assessment🏅 taxes are based on the assessed value of the home.

Examples of Special Assessment Taxes

Special assessment districts may be created because the regular property taxes collected are not sufficient to fully ꧒fund a municipalit🐷y. For example, if the population of a small town has declined dramatically, a special assessment tax may be necessary to continue to operate schools, the police department, or a library.

Special assessments more typically are used for the extraordinary expense of a project that benefits the community. For example, a town might levy a 🔥special assessment tax to build a public recreation center or a park. The tax is intended to last for a set number of years. Once the project has been paid for, the tax is discontinued.

The Special Assessment District

However, a special assessment tax may not be levied against an entire municipality. For example, if a large 澳洲幸运5官方开奖结果体彩网:subdivision is built in a previously undeveloped part of town, the municipality may designate that new neighborhood as a spe🅘cial assessment district. The tax revenues collected would be used to pay for necessary infrastructure projects such as access roads and sewer lines that neither the municipality nor the developer wants to pay for.

Special asse✤ssment taxes on a property and what they are b🎀eing used for can be found through a search of the local county assessor’s records.

Special Considerations

Whether or not a special assessment tax is deductible from federal taxes depends on the boundaries of the special assessment🅘 district and the nature of the project funded by the tax.

If a project is seen as benefitting an entire community, it is deductible. If it is seen as benef🐟itting only a portion of the community, it is not deductible. If a special tax is used to fund maintenance or repairs, it is𒆙 deductible. If the money is used for any other purpose, it is not.

So, among the examplesಞ above, the special assessment for infrastructure in a new subdivision would likely not be deductible.