What are special assessments used for in real estate?

Special assessments are specifically designed to fund public improvements that provide direct benefits to property owners within a designated area. These assessments are levied by local governments or municipalities and are typically applied to properties that will directly benefit from the improvements being made, such as new roads, sidewalks, water lines, or sanitation services.

Unlike general property taxes, which are applied uniformly across all properties to fund a variety of services, special assessments are targeted and intended to support specific projects that enhance the value or utility of properties in the area. This ensures that only those property owners who will directly benefit from the improvements are contributing to their costs.

This mechanism allows communities to raise funds for necessary infrastructure projects while ensuring that the financial burden is equitably shared among those who will gain the most benefit from such improvements. In contrast, the other options provided do not accurately reflect the purpose of special assessments.