As residents of vibrant communities like Newport Beach and Costa Mesa, property owners of new construction often encounter additional charges on their tax bills beyond the standard property tax rate. One such fee is the Mello-Roos fee, designed to fund essential public facilities like schools, parks, roads, and libraries. But what exactly are Mello-Roos fees, and how do they affect you as a property owner?
Established through the Mello-Roos Community Facilities Act of 1982, Mello-Roos fees are authorized by state law and are typically initiated by major developers to finance necessary public infrastructure for new developments. These fees are determined based on a formula that considers factors like the size of the property and are collected along with your general property tax bill.
This is, in essence, a double tax added to new construction developments above and beyond the property taxes.
Just like regular property taxes, late payments can lead to penalties and even foreclosure proceedings initiated by the facilities district. It’s essential to stay informed about your tax obligations and ensure timely payments to avoid any potential issues.
Understanding the duration of Mello-Roos fees is crucial. While bonds are typically paid off over 20 years, state law allows for up to 40 years of payments. Homebuyers have the option to pay their Mello-Roos tax in full at the time of purchase, providing flexibility in managing these fees.
It’s also important to note that Mello-Roos fees can fluctuate over time, with a maximum increase of 2% per year over 25 years. However, there’s also the possibility of decreases if state or alternative funds become available to offset existing bond indebtedness or fund new facilities.
If you have questions or concerns about Mello-Roos fees specific to your property during a potential purchase, consult with your REALTOR® or real estate attorney. If you have questions or concerns about Mello-Roos fees specific to your property that you currently own, contacting your local county assessor’s office is your best course of action. They can provide you with the necessary information and guidance regarding Mello-Roos districts and fees.
At Lucas Real Estate, we understand the complexities of property taxes and are here to provide you with expert guidance tailored to your unique situation. Whether you’re a homeowner in Newport Beach, Costa Mesa, or beyond, we’re committed to helping you navigate the nuances of property ownership with confidence and clarity including navigating real estate tax considerations. Reach out to us today for personalized assistance and peace of mind.
– Devin Lucas
Author Devin R. Lucas is a REALTOR®, Real Estate Attorney and real estate Broker and specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individuals, Trustees and investors in residential real estate.
Lucas Real Estate – Attorney Devin Lucas and CPA Courtney Lucas – are experts in residential real estate transactions, tax considerations, Trustee representation and California’s Proposition 19.
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Newport Beach | California | 92663-4023Lucas Real Estate is a unique full-service residential real estate brokerage providing related residential real estate legal services and real estate tax considerations and planning, based in Newport Beach, California. | Devin Lucas is a licensed California Real Estate Attorney, Real Estate Broker and REALTOR® | Courtney Lucas is a California licensed CPA and REALTOR®
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