Special Assessments

A special assessment is a one-time tax levied on specific properties that benefit from a public improvement, such as new sidewalks, streetlights, or paved roads. It is not an ad valorem tax based on value; it is based on the benefit received (often calculated by "front footage"—the width of the lot facing the street). Like property taxes, special assessments become a superior lien on the property, meaning they take priority over mortgages and must be paid before other debts.If property taxes are not paid by April 1st, they become delinquent. To collect the money, the local government holds a Tax Certificate Auction around June 1st. Investors bid on these certificates. They do not bid on the price of the certificate (which is the amount of taxes owed); they bid on the interest rate they will accept, starting at 18% and bidding down. The lowest bidder wins. The property owner then has two years to pay back the investor plus interest to save their home. If they fail to pay after two years, the investor can apply for a "tax deed" to force a foreclosure sale of the property.