CHICAGO --- Now that tax filing season is here, homeowners should be aware that some real estate tax-related items, such as local benefits and improvements, may or may not be tax deductible. Local benefits and improvements often referred to as "Special Assessments" include assessments for streets, sidewalks, water mains, sewer lines, public parking facilities, and similar improvements.

Special Assessment taxes are deductible if they are for maintenance, repair, or interest charges related to those benefits. For example, a charge to repair an existing sidewalk and any interest included in that charge is deductible. If only a part of the assessment is for maintenance, repairs, or interest, the allocation of the amounts assessed must be shown in order to claim the deduction. If the part of the assessment for maintenance, repair, or interest cannot be determined, none of it is deductible.

Assessments made for local benefits and improvements are not tax deductible if the improvements increase the value of the property and the property subject to the tax assessment is limited to the property that benefits from the improvements. For example—a tax assessment for homeowners in a new community to pay for the initial installation of streets, sidewalks, and sewer lines for that community would not be tax deductible. In these situations, the basis of the homeowner’s property should be increased by the amount of the tax assessment.

Tax assessments for local benefits may be included in a homeowner’s real estate tax bill. If a copy of the real estate tax bill is not furnished, the homeowner should request it from the taxing authority or mortgage lender.