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All homes have property taxes and accompanying special assessments. Some homes in southern California also have additional taxes called Mello Roos. Mello Roos is a method of financing or underwriting the cost of public improvements such as roads, utilities, schools, libraries, fire stations, and recreational facilities, etc.
In 1978, Proposition 13 passed limiting the amount of revenue that could be raised to support new developments through traditional means. So Mello Roos was created in 1982. . Only those new developments that choose to create a Community Facilities District carry this added tax burden on homeowners.
Bonds usually run for 20 to 40 years and are repaid by homeowners. This means for example that your "overall tax burden" when you purchase a home with Mello Roos financing can be 60%, 80%, or 100% higher than your basic property tax obligation would be if you purchased the same home without Mello Roos financing.
You should always investigate the basis for the tax, duration, and any chance of increase when purchasing a home with Mello Roos. Also, be aware that this added burden will affect your qualifying ratios. |
