Proposition 13 was passed in 1978 by the Howard Jarvis Administration to limit propety taxes in the state of California. Proposition 13 really controlled the capacity of government to use property taxes to build public improvements and services. Consequently, Californians had to find different methods to finance government community improvements in their communities like streets, schools, parks, etc. The Mello-Roos Community Facilities Act of 1982 was enacted by the California legislature, the Act enabled Community Facilities Districts (CFDs) to be established as a way of getting this critical community funding.
Each Community Financial District has is different Mellow-Roos Property Tax. Normally|Generally|Typically, an approved formula that applies to the residence size or lot size is used to ascertain the amount of an individual assessment. So a smaller house in a community will pay less than a larger residence in the same neighborhood. Often, the special property taxes and assessments do not go above 1% to 1.5% of the market value of new homes. Also, the total quantity of all yearly property taxes normally do not go above 2% to 2.5% of the house’s taxable property base value. If you take action to lower your taxable base value meaning, your propety taxes you will save a significant amount of money especially, if you have Mellow-Roos Taxes on your house since of the increased percentage in property taxes you pay. Most likely you will save thousands every year because even though the percentages are low values in California are high enough to make them substantial.
In California thousands of homeowners in many major city areas have lost in excess of $200,000 in market value on their homes and paying 1.25% in property taxes they will save at least $2,500 per year for every year they keep their home! Yet, that same taxpayer at a 2% property tax rate because of Mellow-Roos taxes will save over $4,000 every year in property taxes! If you are paying Mellow-Roos and have lost $200,000 since you bought your house and let’s say you plan to own your residence for the next 10 years, you will save $40,000! Don’t settle for Proposition 8 the temporary decline in property taxes, its only temporary. Learning to PERMANENTLY lower your taxable base value in California is the key to saving thousands over the course of your home ownership which is disclosed in the California Little Black Book.
Generally Mellow-Roos Property Taxes are applied to recently built communities such as sizeable Planned Unit Developments (PUD) where there have been numerous homes built in a short period of time and the taxes are needed to establish city services. Ive seen Planned Unit Developments that had more than 4,000 houses built! So, the county and city municipalities need to find funds to establish the roads, sewage systems, schools, recreation centers, parks and so much more. Before purchasing a home with Mellow-Roos property taxes you will be notified in the beginning negotiation stages of acquiring the house and during escrow that these property taxes apply. You won’t be blind sighted by Mellow-Roos Taxes, it is required that you are notified prior to buying.
About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.
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Topics: property taxes, planned unit development, pud, real estate sales