PSI Oklahoma Real Estate Practice Test

What is the benefit of a special assessment tax?

1. It funds uniform services across neighborhoods

2. It is based on property size only

3. It directly supports local infrastructure improvements

4. It guarantees a fixed rate tax refund

The correct answer is: It directly supports local infrastructure improvements

A special assessment tax is primarily implemented to fund specific local infrastructure improvements, such as roads, sidewalks, parks, or utilities that directly benefit a particular area or property. By levying this type of tax, local governments can raise the necessary funds to complete these targeted projects without impacting the entire community or general fund budget. This approach ensures that only those who will benefit from the improvements contribute financially, which is a fair and efficient means of funding necessary enhancements to the community's infrastructure. The other options do not adequately describe the nature or purpose of a special assessment tax. Uniform services across neighborhoods are typically funded through general taxes rather than special assessments, indicating that not all neighborhoods directly benefit from these funds. Additionally, while property size may influence assessments in certain contexts, special assessments are not exclusively based on this factor; they are more about the benefit received from specific improvements. Finally, there is no guarantee of a fixed rate tax refund associated with special assessments, as they are not designed for individual reimbursement but rather for funding specific projects within a community.