The Howard Jarvis Administration was the driving force in implementing Proposition 13 which put a cap on property taxes in the state of California. As a result, of Proposition 13 California Residents had to find new ways to pay for government community improvements in their neighborhoods like roads, schools, parks, etc. The Mello-Roos Community Facilities Act of 1982 was enacted by the California legislature, the Act enabled Community Facilities Districts (CFD’s) to be put into place as a way of getting this critical community funding.
Mellow-Roos Property Tax changes for each Community Financial District. Generally, an accepted method that pertains to the home size which is based on the square footage or parcel size is used to establish the amount of particular assessment. So a smaller home in a community will pay less than a larger house in the same community. Often, the special property taxes and assessments do not exceed 1% to 1.5% of the market value of new homes. Additionally, the complete quantity of all annual property taxes generally does not go above 2% to 2.5% of the residence’s taxable property base value. When you lower your taxable base value or in other words, your property tax you will save a significant amount of money especially, if you have Mellow-Roos Taxes on your residence because of the increased percentage in property taxes you pay.
In California thousands of homeowners in many urban areas have lost in excess of $200,000 in market value on their houses and paying 1.25% in property taxes they will save at least $2,500 per year for every year they keep their house! Yet, that same homeowner 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 home and let’s say you plan to own your home 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 applicable to recently built neighborhoods like sizable Planned Unit Developments (PUD) where there have been numerous residences built at once and the property taxes are necessary to create city services. Ive seen Planned Unit Developments that had more than 4,000 houses built! So, the county and city governments need to find funding to build the roads, sewage systems, schools, recreation centers, parks and so much more. Prior to purchasing a residence with Mellow-Roos property taxes you will be informed in the beginning negotiation stages of buying the house and while in 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 purchasing.
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.
