Special Assessment

Special Assessment means:
an assessment made against a property to pay for a public improvement (e.g., sewers, curbs, or sidewalks), by which the assessed property is supposed to be especially benefited. A special assessment is not tax deductible but is capitalized into the basis of the property.

Example of Special Assessment:

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The Lawsons own a house in a developing section of the city. When the city constructs curbs and gutters along their street, the Lawsons are levied a special assessment, in the form of a one-time tax, to pay for this public improvement.