Special Assessment Tax: FAQs
Here are some frequently asked questions about special assessment taxes:
Are special assessment taxes deductible?
You may wonder if you can get a property tax deduction for special assessments.
The federal government allows property owners to deduct the cost of property taxes on federal income tax returns. That doesn't include special assessments, though. Special assessment taxes apply only to the special assessment districts.
However, a special assessment tax is deductible depending on the boundaries of the district. Maintenance, repairs or improvements are deductible, but any other purpose is nondeductible.
What is a special assessment district?
Regularly collected property taxes may not sufficiently fund a particular municipality, so a special assessment district forms. A special assessment district is set up for property owners to compensate the city or municipality for all expenses related to repairs or property improvements.
The assessed value of a home and the special assessment district directly interrelate because each homeowner pays a portion of the overall cost based on the assessed value of their property. Assessed value, which evaluates the fair market value of a property, is determined by an assessor.
What exemptions are there for special assessment taxes?
Special assessment taxes could increase the amount you pay in taxes. You could fit the criteria for property tax exemptions based on your age, disability or other factors. Consulting a local tax professional could help you lower your tax bill if you qualify.
