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 ability of government to use property taxes to build public facilities and services. Consequently, Californians were forced to find different methods to fund 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 created Community Facilities Districts (CFD’s) to be put into place as a way of obtaining this critical neighborhood funding.

The quantity of Mellow-Roos Property Taxes changes from one CFD to another. Typically, an adopted method that pertains to the size of the house (square footage or lot size) is utilized to establish the amount of an individual assessment. Generally, the special property tax and assessments do not exceed 1% to 1.5% of the market value of new homes. Also, the complete amount of all yearly property tax usually does not go above 2% to 2.5% of the residence’s taxable property base value. So if you are able to lower your taxable base value or in other words, your propety taxes you will save a substantial amount of money if you have Mellow-Roos Taxes on your home because of the increased percentage in property taxes you pay.

In California thousands of homeowners in many major city 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 based on 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 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 applicable to recently built communities like sizable Planned Unit Developments (PUD) where there have been numerous houses built in a short period of time and the property taxes are needed to create city services. Ive seen Planned Unit Developments that had upwards of 4,000 houses built! So, the county and city governments need to find financing to establish the roads, sewage systems, schools, recreation centers, parks and so much more. Before buying a house with Mellow-Roos property taxes you will be informed in the beginning negotiation stages of purchasing the home and during escrow that these property taxes apply. You won’t be blind sighted by Mellow-Roos Taxes, it is required that you are informed before 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.