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The Real McCoy: Why do I have to pay more taxes in Mello-Roos?

By: Kari McCoy
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Dear Kari, I am completely in the dark when it comes to Mello-Roos and why should I pay for it? Answer: A Mello-Roos is when a home is in an area where a special (extra) tax is imposed on the real property owners within a Community Facilities District. This district has elected to have public financing through the sale of bonds for the purpose of financing certain public services that may include public improvements and or services and or continued services. This tax you pay may be used to pay the payments of the principal and or interest on these Mello-Roos bonds. For example the taxes may be paying for such items as water, sewage, drainage, schools, parks, electricity, fire protection, recreation programs, library services maintenance of parkways, open space, school sites, natural gas pipelines, telephone lines and others. The costs of these special taxes run and stay with the property and usually are collected with your general property tax bill. The tax will stay in effect until the principal and interest on the bonds are paid off. The longest time line shall not usually exceed 40 years and may be as short as 10 years in some situations. Please know that the Mello-Roos tax payments have the guidelines and the same penalties as the regular property taxes. Therefore if payments are not paid, the Facilities District could place a lien and even further withdraw the assessment from the tax roll and commence judicial foreclosure. The amount of this special tax may not exceed the maximum amount spelled out when the district was originally created. When a buyer is purchasing a home with Mello-Roos, the amount, rate, method of apportionment, manner of collection and the maximum sum and yearly cost will be specified in the public record report including the time frame ending the tax. In some situations, the previous owner has paid the Mello-Roos complete and then there is no further monies owed. That is a lucky find. Remember that the cost of this tax is a set sum and does not go up or down with the value of the property. When a property with Mello-Roos is sold, the total cost amounts must be paid in full or title may not pass to the new buyer. For more information contact your local title company or your local Realtor. Kari McCoy has been a Realtor for 25 years and owns the Kari McCoy Group, Residential Real Estate, at Coldwell Banker. She can be reached at 941-9540, sold@karimccoygroup.com or at Karimccoy.com.