What Are Mello-Roos Taxes?

Find out what exactly a Mello-Roos tax is and how it affects buyers and sellers of San Diego real estate.

San Diego Assessors Website: Mello-Roos Lookup
$1,225,000
Fallbrook, CA 92028
Area: 3202
3
3
$524,999
San Diego, CA 92122
Area: 934
2
2
$995,000
San Diego, CA 92109
Area: 1276
3
3
$450,000
Chula Vista, CA 91915
Area: 1268
2
2
$750,000
San Diego, CA 92115
Area: 1028
3
1
$329,999
Santee, CA 92071
Area: 896
2
1
$749,000
Vista, CA 92081
Area: 2130
3
2
$739,900
Bonita, CA 91902
Area: 2213
4
3
Transcript:

Hi everybody. John Collins, San Diego Realtor. I wanted to do a quick video today on Mello-Roos taxes. What are they and what do they mean for property owners when they are buying and selling San Diego Real Estate.

First, a little bit of history: Mello-Roos taxes are a supplemental tax that you pay along with your regular property tax. Back in the 70's, California passed Prop 13 which limited property taxes and their growth. Good thing for the property owners, but it also meant that by the early 80's they were looking for ways to raise money for infrastructure projects; Schools, plumbing, street lights, street paving. All those things that improve a neighborhood. And, what happened was a guy named Mello and a guy named Roos got together and they wrote some legislation that allowed areas to create what they called districts, a "CFD" is another term you'll hear for a Mello-Roos district. Those districts could then sell bonds and use that money for infrastructure projects and the money would be paid back over time by the property owners in that area via the a Mello-Roos tax on their property tax.

Now, the advantages of being in a Mello-Roos district is first and foremost that your infrastructure is probably going to be better. Newer schools, streets, plubming, street lights and all those things. More development and more properties typically means more property value.

A disadvantage of cours is that you are subject to paying that tax while you own the property and then when you sell the property you have to find somebody who will be willing to pay that additional tax as well. That's why they sometimes call Mello-Roos the "property tax you choose". You are effectively volunteering to pay it by buying in that area.

The areas in San Diego where you are most likely to find Mello-Roos districts, find yourself in a Mello-Roos district; San Marcos and Chula Vista both have quite a few. Poway also, although those are almost all associated with their award winning school district so, probably, if you have a family money that you'll consider very well spent.

How much are they and how long do they last: It can vary a lot. Per month, once you work it out, it could be as little as twenty five or thirty dollars, or it could be hundreds of dollars per month. So you really want to make sure you know that going in, in advance. There are ways to know, of course, during the process of escrow. You would be finding that out through disclosures and title reports, but not always the preliminary title report, so you probably want to know before you get that far along in a transaction. There is a county assessors website that I'll link to below that you can look up by address or by neighborhood. And then, if you are just pulling public tax records, you can find out that way as well.

Term-wise, typically between seven and thirty years is the Mello-Roos obligation. So when you are buying in a Mello-Roos district how much is important, but also how long is left on that obligation.

I hope this is all great information for you and useful to you in your property search. Please do give me a call if you have any other questions about Mello-Roos, Mello-Roos districts, or property taxes, or anything else really to do with San Diego real estate. I appreciate the opportunity to help.

I look forward to that conversation and in the meantime please enjoy your day and living life in America's Finest City. Alright. Take care.

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