Betterment, in a legal sense, is an increase in the value of real property through causes other than the owner's actions toward that property. A betterment tax is a tax imposed on the owner of a property for improvements made to that property that are outside of his control.

Basics

Betterment to a person's property increases the value of that property. If the improvements were not originated by the owner, state law allows the city to assess the cost of a betterment to affected properties.

What is Considered a Betterment?

Betterments are typically public improvements undertaken by the city, such as the layout and construction of new streets or the upgrading of sidewalks. Replacements of streets, sidewalks or sewers are not considered betterments. The rezoning of an area that increases property value could also be considered a betterment.

Problems

The betterment tax grants the government a certain level of responsibility for changes to real property's value, which some people question. Critics debate the government's right and ability to assess betterments. Others question whether the government should be held responsible for property value decline that results from circumstances outside the property owner's control.

Benefits

Supporters believe that a betterment tax helps to encourage government development. This development, in turn, benefits the property owners and community at large. To garner support and lessen the financial burden, some states have created a graded taxing system.

History

The betterment tax has been in place since the early 1800s. It is said to have originated in the United States, although some believe the tax was actually created in England as part of the rebuilding of London after the Great Fire of the 17th century.

Source:

City of Boston Public Improvement Commission: Betterment Tax Bill Explained

Merriam-Webster Dictionary: Betterment