ALL ABOUT S.I.D.s
When buying and selling a home, taxes can be confusing, to say the least. For this reason, it’s important to be informed so that you can navigate your transaction without feeling too overwhelmed (also, why you should have a Realtor® you trust and feel comfortable asking questions). Special Improvement Districts often come up on the Buy Sell contract, as many buyers will ask the sellers to pay them off. Let’s talk about how this works so you can make informed decisions on both sides.
If you look at home’s tax details, you will find a breakdown of all the designations to which the taxes are allocated. Toward the bottom you will find the SIDs. These are taxes specific to the home’s area. For instance, I live in Lolo by the Slough. Every summer they spray for mosquitoes, and if I look on my tax bill there is a Lolo Mosquito District charge of $14.01 for 2019. Other examples would be if they improved the sidewalks, updated the streetlamps, or put in a new common space feature. Some improvements, such as spraying for mosquitoes, are an ongoing expense that cannot be paid off. Others, like sidewalks, are a one-time expense paid in increments that will drop off once paid fully. As a buyer, you have the option of asking these to be paid off, so as a seller, it behooves you to know what these are or if you even have them, so you can wisely decide whether or not you’d like to concede.
As a Realtor®, we commonly see these asked to be paid off, but often find that there are no SIDs that can be, so we will very often counter with a quick change to the Buy Sell to make the SIDs assumable to the buyer.
I hope this helps you understand one more piece to the puzzle of buying and selling. As always: the more you know the better off you’ll be.