What is a Special Assessment? Property Tax Series

Being a homeowner comes with a host of social responsibilities, both to your immediate neighborhood, and to your overall surrounding community and town at-large. You likely already know about Property Taxes and why they exist (read up on that here if you haven’t seen our article about it yet), but those aren’t the only expense associated with owning a home in any particular area. Occasionally, your local government may need to perform construction or maintenance upon local infrastructure beyond the norm. When this happens, there may not be enough funding in the general budget to pay for these special projects.

Special assessments are a one-time surtax that is assigned to properties that reside only within the area that the special project is taking place – in other words, if there is an initiative to replace the streetlights along one of the streets near your house, you will receive a letter in the mail informing you about a special assessment that is being done to pay for the improvement of your neighborhood’s publicly-provided lighting. The letter will tell you when this decision was made, what it will be paying for, and how long the project and special assessment will run. Smaller projects will usually only apply to one calendar year, while larger, more complicated projects may run for several years in a row.

If you find yourself and your home subject to a special assessment, you should definitely read the letter that you receive in the mail, to see how much you’ll be responsible for paying, and if you have the option to pay it in one lump sum, or in installments. If you misplace the letter, you should be able to find detailed information on your City or County’s websites as well. Sometimes, when you elect to pay in annual installments on top of your normal Property Tax bill, an administrative fee is applied as well (usually 3-5%), so keep that in mind when making your decision on how you want to pay your portion of the special assessment.

Here’s an example of a special assessment that happened within the last decade – if you lived in and owned a home in Dayton sometime between 2014 and 2020, you may be familiar with this one:

The City of Dayton determined in 2014 that they needed to do significant work to improve their street lighting system to ensure public safety for all residents. This was a large undertaking as it wasn’t just a few streets or blocks of lights that were being replaced, but a huge swath of the entire City as a whole. To fund this project, anyone who owned property within the selected area (you can see the entire map on the City of Dayton’s website here) was charged with paying a portion, based on whether they fell into “District A” or “District B.” The assessment ran for six years, from 2014 through 2020.

“District A” was the central business district, and the special assessment surtax rate levied on those properties was at a rate of 0.0348% of each property’s assessed value. “District B” was outside of District A, and covered the residential neighborhoods, at a rate of 0.049% of the property’s assessed value. If you owned a home within District B with a Montgomery County assessed value of $125,000, your responsibility towards the streetlight project would have been $61.25 annually, for a grand total of $367.50 due.

Most special assessment tax projects won’t break the bank for you, and you may not even really notice them if you’re not paying close attention. If you don’t pay your portion in advance, it just gets tacked onto your normal Property Tax bills, so it’s easy to miss.

When selling your home, if there is an active special assessment surtax on your property (and you didn’t pay it in full, in advance), that will be subtracted from your proceeds at closing. The special assessment was placed during your ownership of the home, so you are ultimately responsible for the full bill – but even then, as shown in the example above, it’s usually a small expense that barely impacts your bottom line. In fact, some smaller projects may cost homeowners less than $25 each to fund, while everyone gets to enjoy the benefits of whatever work gets completed with that revenue (sewers are included in the special assessment category, by the way, and I think we can ALL agree that no one wants those to fail, EVER).

If you’ve been considering selling your home, but you’re worried about the condition it’s in, or you’re behind on your Property Taxes, or you’re being foreclosed on and you don’t know where to turn, then give us a call and see what we can offer you. We buy houses in all conditions, all circumstances, and we pay cash for them. Fill out the form below to contact us and see what we can do! There’s no obligation on your part, and it’s completely free.

What Do You Have To Lose? Get Started Now...

We buy houses in any condition in Ohio. Sell your house for cash to the #1 house cash buyer in Ohio! There are no commissions or hidden fees. Get your fair offer with no obligation whatsoever. Do not miss this chance! Submit your personal information and your property's or call
  • This field is for validation purposes and should be left unchanged.
Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

What Do You Have To Lose? Get Started Now....

We buy houses in ANY CONDITION in Ohio. There are no commissions or fees and no obligation whatsoever. Start below by giving us a bit of information about your property or call
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published.