Ask the Expert – A Guide to Mello Roos Taxes

Q. What is a Mello-Roos District?

A. A Mello-Roos District is an area where a special tax is imposed on those real property owners within a community facilities district. It is an area that has chosen to seek public financing through the sale of bonds for the purpose of paying for certain public improvements and services.

Mello-Roos is used to make payments of principal and interest on the bonds, and is collected with your general tax bill. It is also subject to the same penalties that apply to regular property taxes and stays in effect until the bonds are paid off. Any costs incurred in collecting the special tax may be added in, but in no case may the bond period be longer than 40 years. The tax is assessed against the land, not on the property value.

Q. How does Proposition 13 affect my Mello-Roos taxes?

A. Although Proposition 13 tax limits are on the total value of the real property, Mello-Roos taxes are equally and uniformly applied to all properties. If you don’t pay on time, then the facilities district that obtained the lien can withdraw the assessment from the tax roll and commence judicial foreclosure.

Q. What are my Mello-Roos Taxes paying for?

A. Your taxes may be paying for services and facilities. The services may be financed only to the extent of new growth.

Services may include police and fire departments, ambulance, paramedic, recreation and library services, the operation and maintenance of parks and green spaces, parkways and open spaces, museums and cultural facilities, flood and storm protection, and services for the removal of any threatening hazardous substance.

Facilities that are often financed via Mello-Roos properties with an estimated life of five years or longer, parks, recreation facilities, parkway facilities, open space facilities, elementary and secondary school sites and structures, libraries, child care facilities, natural gas pipeline facilities, telephone lines, electrical energy facilities, and cable television lines.

Q. When do I pay these taxes?

A. As a new purchaser, you will be notified during escrow whether the property you are buying is located in an area subject to a Mello-Roos tax. By purchasing an interest in a subdivision within a Community Facilities District, you can be expected to be assessed for a Mello-Roos tax which will typically be collected with your regular tax bill. These special payments are subject to the same penalties that apply to regular property taxes. They will be due each fiscal year until the bond is paid off.

Q. How long do the taxes stay in effect?

A. The taxes will stay in effect until the principal and interest of the bonds are paid off, along with any reasonable administrative costs incurred in collecting the special tax. In no case shall the tax period exceed 40 years.

Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885,
(O) 310-571-1364 DIRECT
(D) (310) 800-2954

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