What You Need To Know About Special Assessment Taxes

As a homeowner, you may not realize all of the different kinds of taxes that you pay, in addition to property taxes. While every district and county handles taxes a little differently, most have what’s called a “special assessment tax.” A special assessment tax is a  tax assessed by the local government to pay for their property and other community initiatives. This specialized tax is added on top of your property taxes. The tax goes toward a specific geographic region known as a special assessment district, and the property owners in that district are the ones who foot the bill. Here are all the details about these taxes and how they can impact your wallet. 

The Skinny On Special Assessment Taxes

A special tax assessment is levied on taxpayers to fund a specific project, usually something like road construction or building maintenance.

The process for forming a special assessment tax goes like this: 

  • A state or local government creates an intent for the project. This states the proposed improvement and district it will affect
  • A public hearing is held where the property tax rate is announced. Taxpayers will vote and choose to dispute the tax.
  • Taxes then get collected. Homeowners who don’t pay the tax could get a lien placed on their homes.

Unfortunately, property taxes alone are not always enough to fund an assessment district’s expenses related to repairs or property improvements. The special assessment taxes help cover the gap between property taxes and the cost of projects. 

The assessed value, which evaluates the fair market value of a property, is done by an assessor and is used to determine how much of the special assessment tax you pay. 

Here are some of the things that special assessment taxes fund: 

  • Water and sewer lines
  • Streets, roads, and sidewalk paving
  • Infrastructure projects
  • Streetlights
  • Parking structures
  • Building construction projects
  • Public safety projects
  • Recreational projects, such as trails, skate parks, baseball fields, and more
  • Other types of projects 

While taxes can be unpleasant, the federal government allows property owners to deduct the cost of property taxes on federal income tax returns. However, that doesn’t include special assessments. 

What Exemptions Are There?

Special assessment taxes could increase your tax burden; there’s no way around it. However, several exemptions may help ease your burden.

Exemptions include, but are not limited to: 

  • Residence homestead/inherited residence homestead
  • All residence homestead owners are allowed a $25,000 homestead exemption from their home’s value for school taxes.
  • Age 65 or older or disabled persons
  • All homeowners aged 65 years or older qualify for a $10,000 exemption.
  • Disabled veterans and surviving spouses of disabled veterans/first responders killed in the line of duty
  • A disabled veteran who receives 100% disability compensation may be entitled to a total property tax exemption.
    • This exemption also covers surviving spouses.

After a home’s market value is determined, exemptions are factored in to lower property taxes, including any special assessment taxes. 

Special assessment taxes usually occur when a state or local government creates a resolution of intent for the project and sets a date for a public hearing. Just this month, Harris County Engineer Milton Rahman presented a breakdown of the preliminary plan for taxes during a commissioners’ court meeting. The plan proposes allocating a total of $700 million for roads and transit, $200 million for parks, and $100 million for public safety, so it’s definitely something worth paying attention to. 

While a billion-dollar bond would increase property taxes by just $27 a year for residents with homes valued at around $314,000, Daniel Ramos, executive director of the Office of Management and Budget, says that “rising property values coupled with the county paying its bonds means issuing a bond could maintain rather than increase the tax rate.” We will see how it all plays out later this year. 

How Texas Property Tax Reductions Can Help You Save On Property Taxes

Texas Property Tax Reductions (TXTPR) can help you reduce your tax burden. We have a proven track record of success. We have successfully reduced property tax values for over 97.6% of our clients, with an average reduction of $42,302 and an average tax savings of just over $1,184.

Contact us here to see how we can help you save. 

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