Lower Mellow-Roos Property Tax
When Proposition 13 passed in 1978, it severely limited the ability of local governments to use property taxes to construct public facilities and services. Consequently, California Residents were forced to discover different ways to pay for public facilities in their communities such as roads, schools, parks, etc. The Mello-Roos Community Facilities Act of 1982 was enacted by the State legislature, the Act enabled Community Facilities Districts (CFD’s) to be established by local government agencies as a means of getting this crucial community funding.
The quantity of Mellow-Roos Property Taxes is different from one CFD to another. Normally, an approved method that relates to the size of the home (square footage or parcel size) is utilized to determine the quantity of an individual assessment. Generally, the special property tax and assessments do not go above 1% to 1.5% of the market value of new homes. In Addition to, the complete amount of all annual property tax usually does not go above 2% to 2.5% of the house’s taxable property base value. So if you can to lower your taxable base value or in other words, your propety tax you will save a substantial amount of money if you have Mellow-Roos Taxes on your residence because of the increased percentage in property taxes you pay.
In California many homeowners in most urban areas have lost in excess of $200,000 in market value on their houses and at the normal rate of 1.25% in property taxes they will save $2,500 per year for every year they keep their residence! 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 purchased your home and let’s say you intend to stay in 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.
Frequently Mellow-Roos Property Taxes are applied to newly built communities such as large Planned Unit Developments (PUD) where there have been many new houses built in a short period of time and the taxes are needed to create city services. Ive seen Planned Unit Developments that had upwards of 5,000 homes built! So, the county and city governments need to scramble for financing to build the roads, sewage systems, schools, recreation centers, parks and so much more. Before purchasing a house with Mellow-Roos property taxes you will be notified in the initial negotiation stages of buying the house and during escrow that these property taxes apply. You will never 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.