Proposition 13 was passed in 1978 by the Howard Jarvis Administration to limit propety taxes in the state of California. Proposition 13 severely controlled the ability of government to use property taxes to build public improvements and services. As a result, Californians had to discover new ways to finance government community facilities in their communities like roads, 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 as a means of getting this crucial neighborhood funding.
The quantity of Mellow-Roos Property Taxes varies from one CFD to another. Generally, an adopted method that pertains to the size of the home (square footage or parcel size) is used to establish the amount of an individual assessment. Generally, the special property taxes 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 house’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 significant amount of money if you have Mellow-Roos Taxes on your house since of the increased percentage in property taxes you pay.
The average homeowner in most major city areas in California in todays real estate market has lost in excess of $ 200,000 in market value and at the normal rate of 1.25% in property taxes they will save $ 2,500 per year for every year they own their residence! However, that same homeowner at a 2% property tax rate based on of Mellow-Roos taxes will save $ 4,000 per year in property taxes! 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 applied to recently built communities such as sizeable Planned Unit Developments (PUD) where there have been numerous residences built at once and the property taxes are needed to establish city services. Ive seen Planned Unit Developments that had more than 4,000 houses built! So, the county and city governments need to find financing to build the roads, sewage systems, schools, recreation centers, parks and so much more. Prior to buying a home with Mellow-Roos property taxes you will be notified in the initial negotiation stages of acquiring the home and while in escrow that these property taxes apply. You won’t 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.
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