Special Assessment Tax

DEFINITION of 'Special Assessment Tax'

The levy assessed against the portion of a property that has been condemned by a public authority. The special assessment tax will reduce the amount of compensation awarded to the property owner because the owner is considered to have also benefited from the improvement.

BREAKING DOWN 'Special Assessment Tax'

A public authority can only make a partial condemnation it needs to make way for a public improvement. If the amount of the tax exceeds the compensation, then the difference is added to the basis of the property.