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Understanding Mello-Roos
September 12th, 2013 12:11 PM
 

Understanding Mello-Roos

Understanding Mello-Roos

Posted: 28 Aug 2013 08:30 AM PDT

Understanding Mello-Roos

In purchasing your new home, your future monthly payments will be made up of principal, interest, real propertytaxes and insurance, but what is the tax for the Community Facilities District, otherwise known as a Mello–RoosDistrict?

Q. What is a Mello-Roos District?

A. Mello-Roos District is an area where a special tax is imposed on those real property owners within a CommunityFacilities District. This district has chosen to seek public financing through the sale of bonds for the purpose offinancing certain public improvements and services. These services may include streets, water, sewage anddrainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax you payis used to make the payments of principal and interest on the bonds.

Q. What are my Mello-Roos taxes paying for?

A. Your taxes may be paying for both services and facilities. The services may be financed only to the extent ofnew growth, and services include: police protection, fire protection, ambulance and paramedic services, recreationprogram services, library services, the operation and maintenance of parks, parkways and open space, museums,cultural facilities, flood and storm protection, and services for the removal of any threatening hazardous substance.Facilities which may be financed under the Act include: Property with an estimated useful life of five years orlonger, parks, recreation facilities, parkway facilities, open-space facilities, elementary and secondary school sitesand structures, libraries, child care facilities, natural gas pipeline facilities, telephone lines, facilities to transmit anddistribute electrical energy, cable television lines, and others.

Q. When do I pay these taxes?

A. By purchasing an interest in a subdivision within a Community Facilities District you can expect to be assessedfor a Mello-Roos tax which will typically be collected with your general property tax bill. These special tax paymentsare subject to the same penalties that apply to regular property taxes.

Q. How long does the tax stay in effect?

A. The tax will stay in effect until the principal and interest on the bonds are paid off along with any reasonableadministrative costs incurred in collecting the special tax or so long as it is needed to pay the expenses of services,but in no case shall exceed 40 years.

Q. How much will the Mello-Roos payment be?

A. The amount of tax may vary from year-to-year, but may not exceed the maximum amount specified when thedistrict was created. In the case of the purchase of a new house within a subdivision, the maximum amount of thetax will be specified in the public report.

 

 

 

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Posted by Teresa Molina on September 12th, 2013 12:11 PMPost a Comment

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