No Bull Agent

What Is Mello-Roos and How Can It Impact California Home Buyers?

July 15th, 2010 by Mike Dils
Categories: Frequently Asked Questions, Home Buyers, San Diego, Tax
Please leave a comment.

Newer Communities Are More Likely To Have Mello-Roos

Depending on where your home search takes you within San Diego County and the state of California, Mello-Roos may or may not be a consideration.  So, what is it and why should you care?  The short answer is that it is a special tax on homeowners who live in a community that used bonds to pay for the infrastructure within that community.  The Mello-Roos is basically the repayment for those bonds.  When we take our clients around to view homes, Mello-Roos is often viewed as a four-letter word.  Are there advantages to living in a community with this tax?  This post will discuss both sides.

Mello-Roos, also known as the Community Facilities District Act (CFD), comes from the names of its co-authors.  Senator Henry Mello and Assemblyman Mike Roos were instrumental in getting this act passed through the California State Legislature in 1982.  It was developed in response to the passing of Proposition 13 in 1978 which made it more difficult for local governments to use property tax revenue for public facilities and services.  In searching for other options to pay for these services, Mello-Roos was created.  Who decides whether a community will have Mello-Roos?

The community in which this tax is considered decides.  The vote must pass in favor of becoming a Mello-Roos community.  Once the vote passes, bonds are issued to support services such as schools, roads, parks, utility connections, sewer, police, fire and life safety.  Mello-Roos is typically paid annually or semi-annually.  The amount and term length of this tax varies from community to community.  When you break it down on a monthly basis, we’ve seen it as low as $80 per month and in upwards of $400 per month.  The term length of Mello-Roos is, on average, between fifteen to twenty years from the year the community was built. Read the rest of this entry »

Tags: california, faq, home buyer, kaplan, mello-roos, nobullagent, prudential california realty, san diego