Lower Mellow-Roos Property Tax
When Proposition 13 passed in 1978, it extremely limited the capacity of local governments to use property taxes to construct public improvements and services. As a result, Californians had to find new ways to fund public improvements in their neighborhoods such as 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 put into place by local government agencies as a means of getting this critical community financing.
The quantity of Mellow-Roos Property Taxes changes from one CFD to another. Typically, an adopted formula that pertains to the size of the home (square footage or lot size) is used to establish the quantity of an individual assessment. Often, the special property tax and assessments do not go above 1% to 1.5% of the market value of new homes. Additionally, the complete amount of all annual property tax usually does not go above 2% to 2.5% of the residence'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 home since of the higher percentage in property taxes you pay.
In California many homeowners in most major city areas have lost in excess of $200,000 in market value on their homes 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 applicable to newly built neighborhoods like large scale Planned Unit Developments (PUD) where there have been many new houses built in a short period of time and the property taxes are necessary to create city services. Ive seen Planned Unit Developments that had upwards of 5,000 homes built! So, the county and city municipalities need to scramble for financing to establish the roads, sewage systems, schools, recreation centers, parks and so much more. Prior to acquiring a house with Mellow-Roos property taxes you will be notified in the beginning negotiation stages of acquiring the house and while in escrow that these property taxes apply. You will never be blind sighted by Mellow-Roos Taxes, it is required that you are notified before 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.