What in the world? Another fee?!
If you’re buying a newer home in the Las Vegas area for the first time, chances are you’ll run into a SID or LID. And if you haven’t purchased a newer home in Las Vegas before, you may have no clue what these guys are. SIDs and LIDs are somewhat common in the Las Vegas valley with all of the new home construction and are fees placed on a property by the home builder or developer.
SIDs/LIDs are assessments made by municipalities on new communities when a city or county installs infrastructure on previously undeveloped land. This infrastructure includes things like paved streets, sewage and plumbing, and fire hydrants.
SID stands for Special Improvement District
LID stands for Local Improvement District
They are essentially one in the same, providing the same benefits, but either a SID or LID will be more common depending on the area of Las Vegas you’re purchasing your home in.
The cost of creating the infrastructure is then passed onto the home builder who can do one of two things.
- The home builder can absorb the cost of the SID/LID in the base price of the home.
- The home builder can pass on the cost to the new homeowner. When this occurs homeowners typically have between 10 to 20 years to pay off the amount biannually.
A Few Things to Note
SIDs/LIDs are placed on the property and therefore stay with the property, transferring from one homeowner to the next when a house is sold and purchased. SIDs/LIDs are different than property tax and function more in the way of HOA fees. Meaning, unpaid SIDs/LIDs can result in your home being foreclosed on. It’s important to ask your real estate agent to provide you with the balance and annual payment so you are aware of this additional cost when you purchase the home. You can also check the balance by visiting the AMG NV website. SIDs/LIDs can be fully paid off at any time, but make sure to be aware of potential early payment penalties.
Some Questions You May Have
Should I pay off my SID/LID balance before selling my home?
Typically it is not recommended to pay off your balance prior to selling your home. This is mainly because paying off your balance will not increase your home value. The amount you pay is not something that can be recouped in your house value, therefore it is most common to let the balance transfer to the new homeowner. In addition, there is a possibility of incurring an early payment penalty if the balance is paid off too quickly.
How is the SID/LID calculated?
An assessment of the cost to build and create the infrastructure of an entire community, with the addition of a small fixed interest rate, is divided evenly between the number of properties in that community, assuming that infrastructure benefit is equal for all homes.
If you have questions about SIDs/LIDs, make sure to ask your agent before purchasing your home, or feel free to reach out to us with any other questions you may have!