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Old 04-13-2011, 08:20 AM
 
166 posts, read 380,352 times
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In trying to understand Mello Roos, I found the following information.

[CENTER][SIZE=4]Mello Roos District[/SIZE][/CENTER]
[SIZE=2]A Mello-Roos District is an area where a special tax is imposed on those real property owners within a Community Facilities District. This district has chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax you pay is used to make the payments of principal and interest on the bonds. Mello-Roos taxes cannot be deducted if they are assessed to fund local benefits and improvements that tend to increase the value of your property. Mello-Roos taxes may appear on annual county property tax bill with other deductible property taxes. That does not mean one can deduct the Mello-Roos taxes. One may only be able to deduct a portion of the total property tax shown on your bill.[/SIZE]

I have gleaned tidbits of information regarding Mello Roos from various sources through my home search but there has remained a certain mystery to the topic. Rather like the old saying of "skeletons in the closet", an awareness existed but nobody wanted to discuss it in depth. I am aware that it is a question to bear in mind during the home search to determine how much it would add to the bottom line.

I understand as well that Mello Roos is an additional tax beyond the normal property taxes but the monies are focused on a specific community? Each community developer sets their own level of Mello Roos .... no ceiling placed?

What are opinions on Mello Roos? Highly effective and creates a desirable community? Money is poorly managed and you see little return on the 'investment?' Is there a common range of MR fees? What are some of the fees to expect?

Then, additionally, housing developments also charge HOA fees? These funds are used mostly for landscape maintenance and to cover staff costs?

What to look for and what to avoid?
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Old 04-13-2011, 08:27 AM
 
Location: SW MO
23,593 posts, read 37,462,837 times
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Quote:
Originally Posted by IMidwestMom View Post
In trying to understand Mello Roos...
Good luck! It's like a time-limited tax which adds to your property tax, HOA dues, mortgage, etc. In other words, it's another way for governmenmt and developers to pick your pockets to provide services your property taxes used to take care of, and should. It can significantly add to the monthly "bite" of home ownership in some communities.
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Old 04-13-2011, 08:31 AM
 
Location: Columbia, California
6,664 posts, read 30,603,599 times
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Quote:
Originally Posted by IMidwestMom View Post
I understand as well that Mello Roos is an additional tax beyond the normal property taxes but the monies are focused on a specific community? Each community developer sets their own level of Mello Roos .... no ceiling placed?

Then, additionally, housing developments also charge HOA fees? These funds are used mostly for landscape maintenance and to cover staff costs?
The Mello Roo's are voted in per city, the developers have nothing to do with the added tax

HOA is by tract. This usually covers water, trash and public lighting plus insurance. Any pool/jacuzzi maintaince and landscaping. The HOA board consists of voted in home owners only. This is a un paid position and is to disperse rules and approve projects.

It is easy enough to avoid both Mello Roo's and HOA fees.
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Old 04-13-2011, 09:35 AM
 
Location: Pomona
1,955 posts, read 10,979,128 times
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Quote:
Originally Posted by ferretkona View Post
The Mello Roo's are voted in per city, the developers have nothing to do with the added tax
Well, on new developments, they do in a way. This is through the city doing the infrastructure instead of doing it themselves and including the cost in the sales price of the new houses. Both had to be involved in all this, from environmental reports, permits and planning, etc.

Quote:
It is easy enough to avoid both Mello Roo's and HOA fees.
Buy an older house!

For 15 minute longer commute, there were some new developments in which I could have bought instead. Running the numbers, though, between the Mello Roos (37-1/2 years left) and the two HOAs (one for the community parks/rec, another for the development's common areas), it would run me nearly $800 a month BEFORE I even paid a single penny for the mortgage.

These are non-deductible expenses that grow year after year. Needless to say, I passed.
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Old 04-13-2011, 11:14 AM
 
Location: Declezville, CA
16,806 posts, read 39,928,986 times
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Mello-Roos is an end-run around Prop 13. I avoided it by buying a 70-year-old house in an old, formerly agricultural area. No HOA fees either.
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Old 04-13-2011, 11:15 AM
 
166 posts, read 380,352 times
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Quote:
Originally Posted by Curmudgeon View Post
In other words, it's another way for governmenmt and developers to pick your pockets to provide services your property taxes used to take care of, and should. It can significantly add to the monthly "bite" of home ownership in some communities.
That is where my thoughts are at, at the moment.

Narfcake said ~

... it would run me nearly $800 a month BEFORE I even paid a single penny for the mortgage.


Yowzer!
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Old 04-13-2011, 11:27 AM
 
5,381 posts, read 8,683,351 times
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Quote:
Originally Posted by IMidwestMom View Post
That is where my thoughts are at, at the moment.

Narfcake said ~

... it would run me nearly $800 a month BEFORE I even paid a single penny for the mortgage.


Yowzer!
You got me with the "Yowzer!" I almost spilled my coffee! You can definitely avoid HOA and Mello-Roos fees by buying an older home; and many opt for this very reasonable choice. Still, I think a combined figure of $800/month tends to be on the high side. You can enter an address here and, with a little bit of searching, find-out what the Mello-Roos fees are for a particular Orange County residence:
County Of Orange - Treasurer-Tax Collector's Office
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Old 04-13-2011, 11:29 AM
 
11,715 posts, read 40,438,984 times
Reputation: 7586
Quote:
Originally Posted by ferretkona View Post
The Mello Roo's are voted in per city, the developers have nothing to do with the added tax

HOA is by tract. This usually covers water, trash and public lighting plus insurance. Any pool/jacuzzi maintaince and landscaping. The HOA board consists of voted in home owners only. This is a un paid position and is to disperse rules and approve projects.

It is easy enough to avoid both Mello Roo's and HOA fees.
Developers sell bonds to pay for infrastructure, then the home owners get to pay them off. They're paid on your property tax bill and can be extended. Its basically a tax.

Since when does an HOA for houses pay for water, trash, or insurance? Maybe in condos, but not for houses.
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Old 04-13-2011, 12:31 PM
 
166 posts, read 380,352 times
Reputation: 72
pacifc2 ~ I suppose proper usage would be to say Yowzah but I've said Yowzer for as long as I can recall. Who knows? Thanks for the link to the Tax collector's Office, I will utilize it later for some more research.

EscapeCalifornia ~ "Since when does an HOA for houses pay for water, trash, or insurance? Maybe in condos, but not for houses." I wondered about the correctness of that statement as well.
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Old 04-13-2011, 12:54 PM
 
5,381 posts, read 8,683,351 times
Reputation: 4550
Quote:
pacifc2 ~ I suppose proper usage would be to say Yowzah but I've said Yowzer for as long as I can recall. Who knows?
It was funny either way.That's a lot of money.

Last edited by pacific2; 04-13-2011 at 01:05 PM..
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