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These special assessments are pretty common in Riverside and San Bernardino Counties. A Mello-Roos district is an area where a special property tax on real estate in addition to the normal property tax is imposed on the property owners. These districts have chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services. You won't find Mello-Roos on older homes. They are pretty common in newer neighborhoods. Usually the areas with Mello-Roos have some wonderful community amenities that really benefit the residents of the community, like new schools, or a park, like in the photo here.
Where did Mello-Roos Come From?
When Proposition 13 passed in 1978, it severely limited the ability of local governments to use property taxes to construct public facilities and services. As a result, Californians were forced to find new ways to fund public improvements. The Mello-Roos Community Facilities Act of 1982 was enacted by the California legislature. It enabled “Community Facilities Districts” (or CFD’s) to be established by local government agencies as way of obtaining this crucial community funding. Today the common name for the Facilities Act of 1982 is simply “Mello-Roos.” |
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What Projects are Funded by Mello-Roos?
School districts are the most common beneficiaries of Mello-Roos. State funds are not always available to provide the quality or quantity of facilities necessary in California. In addition, other community needs such as construction and maintenance of public roads, traffic light systems, storm sewers, water mains, police stations, fire stations, ambulance services, public libraries, and parks. All proceeds raised from Mello-Roos assessment must be used only to finance the specific public facilities and/or services that were authorized in that CFD.
How Much Will I Be Assessed?
This will vary from one Mello-Roos district to another. Typically, a formula that relates to the square footage or lot size of the home is used to determine the amount of an individual assessment. In general, the special taxes and assessments do not usually exceed 1.5% of the market value of new homes. Moreover, the total amount of all annual taxes (including property tax) usually does not usually exceed 2.5% of the home’s market value. Mello-Roos assessments are typically a set amount - vs. the property tax that is a percentage of the price paid for the home.
How Do I Pay My Mello-Roos Taxes? This tax is normally added to your property tax bills. Click here for more information about Mello-Roos assessments. This is just one example of information that you need as a home buyer to help you in this exciting and often stressfull time. Be sure to find a good realtor to represent you - you need someone on your side. Don't just go with the agent whose name is on the sign at the house you like - they are representing the seller's best interests. Your realtor can find out if the house or houses you are considering buying has Mello-Roos assessments or not. Visit my website.
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What the heck is "Mello-Roos"? - Answers for California Home Buyers
3 comments • Vicki Pedersen - Riverside and Corona CA Realtor • November 09 2008 10:10AMComments
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Vicki: excellent post on the explanation of Mello Roos. I've only had to deal with them a few times in the OC area.
This is a great post. I knew about it from Southern CA, But In Paso Robles This type of thing is new.