What are special assessments for local improvements?
Special assessments are fees or taxes charged to homeowners by a local government or a homeowners association, for purposes such as the improvement of sewers, roads, or sidewalks, installation of public utilities, landscaping, etc.
Don't include any special assessments used merely for repairs or maintenance. Only improvements that increase the value of your home can be included in the basis of your home. This includes improvements such as road improvement or installation of public utilities or amenities.
For example, if John was assessed a special tax by his city government for the purpose of patching some potholes in the road outside his home, he can't include the amount of the tax in his home basis. If the special assessment was charged for the purpose of improving on the road outside John's home by installing a stoplight, it increases the value of John's home and he can include it in his home basis.
Don't include any special assessments used merely for repairs or maintenance. Only improvements that increase the value of your home can be included in the basis of your home. This includes improvements such as road improvement or installation of public utilities or amenities.
For example, if John was assessed a special tax by his city government for the purpose of patching some potholes in the road outside his home, he can't include the amount of the tax in his home basis. If the special assessment was charged for the purpose of improving on the road outside John's home by installing a stoplight, it increases the value of John's home and he can include it in his home basis.
