Special Assessment Tax: A Definition
Author:
Melissa BrockJan 6, 2024
•4-minute read
As a homeowner, you’re obligated to pay a number of fees, including your property taxes. You might also notice that, in addition to regular property taxes, you may also have to pay a special assessment tax. But what is a special assessment in real estate, and what is the special assessment tax?
Below, we’ll talk about what a special assessment is, how it works and who pays it. Then, we’ll answer some frequently asked questions about special assessment taxes.
What Is A Special Assessment Tax?
A special assessment tax in real estate is an additional property tax assessed by the local government to pay for your property and neighborhood improvement projects. The tax goes toward a specific geographic region known as a special assessment district, and the property owners in that area are the only ones who must pay the tax.
Some counties list special assessments on the non-ad valorem tax line of a property’s bill, but they don't always do this.
What’s The Difference Between Local Special Assessments Vs. HOA Special Assessments?
A special assessment tax is levied on taxpayers in order to fund local government projects and public improvements, like road construction or maintenance. Special assessment taxes are not related to HOA special assessments.
However, a homeowners association (HOA), which is formed by the owners of condominiums, townhouses or other properties, might also be subject to certain special assessments. Instead of a municipality, these HOA improvements are determined by the HOA board of directors and apply only to the members of that HOA.
Your HOA special assessments are outlined in your community’s governing documents, called HOA Covenants, Conditions and Restrictions (CC&Rs).