Today OCCOASTPROPERTIES answers:
What are Mello-Roos Taxes?
source: wikipedia
The standard rate of tax imposed on real property owners various by State and County, and community. The standard assessed tax rate in California is 1.0125% of the assessed value of your home. It's important for you to ask your real estate agent the tax rate in the community you are considering buying your new home in as some areas with Mello-Roos taxes can add 30%-80% more to annual property tax bill.
So, what is Mello-Roos tax and what does it pay for?
A Mello-Roos District is an area where a special property on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds. Mello-Roos is tax deductible in some cases but not in others.
Many communities requiring new schools and infrastructures such as public parks and roads impose Mello-Roos. While property tax is assessed as a percentage of the value of the home, Mello-Roos is independent and could rise or lower and is not subject to Proposition 13.
The fact that an area is subject to Mello-Roos tax or not should not be the final determination whether you buy the home or not, but it should be disclosed and you should be aware of the total annual expenses of your new home.
Many of these communities offer far greater ammenities than those that do not. The areas are typically newer and offer a wide variety of extra benefits to community real property owners, such as, newer schools, parks, libraries and community pools and recreation areas. some even offer waterparks, skate parks, hiking trails and other ammenities which may be beneficial to your family.
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