Wednesday, June 3, 2009

Reduce Mellow-Roos Property Taxes

By Valerie Faltas

The Howard Jarvis Administration was the driving force in implementing Proposition 13 which put a cap on propety taxes in the state of California. Consequently, of Proposition 13 California Homeowners were forced to discover different methods to pay for government community facilities in their neighborhoods like roads, schools, parks, etc. The Mello-Roos Community Facilities Act of 1982 was implemented by the State legislature, the Act created Community Facilities Districts (CFDs) to be established as a means of getting this crucial neighborhood funding.

The amount of Mellow-Roos Property Taxes varies from one CFD to another. Normally, an approved method that relates to the size of the home (square footage or lot size) is utilized to establish the quantity of an individual assessment. In general, the special property taxes and assessments do not exceed 1% to 1.5% of the market value of new homes. In Addition to, the complete amount of all yearly property tax usually does not exceed 2% to 2.5% of the homes taxable property base value. So if you can to lower your taxable base value or in other words, your propety taxes you will save a substantial amount of money if you have Mellow-Roos Taxes on your house because of the higher percentage in property taxes you pay.

In California thousands of homeowners in many major city areas have lost in excess of $200,000 in market value on their homes and paying 1.25% in property taxes they will save at least $2,500 per year for every year they keep their house! Yet, that same taxpayer at a 2% property tax rate based on of Mellow-Roos taxes will save over $4,000 every year in property taxes! If you are paying Mellow-Roos and have lost $200,000 since you bought your home and let's say you plan to own your home for the next 10 years, you will save $40,000! Don't settle for Proposition 8 the temporary decline in property taxes, its only temporary. Learning to PERMANENTLY lower your taxable base value in California is the key to saving thousands over the course of your home ownership which is disclosed in the California Little Black Book.

Frequently Mellow-Roos Property Taxes are applicable to newly built neighborhoods like large Planned Unit Developments (PUD) where there have been many new houses built in a short period of time and the taxes are needed to establish city services. Ive seen Planned Unit Developments that had more than 5,000 homes built! So, the county and city municipalities need to scramble for funding to build the roads, sewage systems, schools, recreation centers, parks and so much more. Before acquiring a residence with Mellow-Roos property taxes you will be informed in the initial negotiation stages of acquiring the house and while in escrow that these property taxes apply. You will never be blind sighted by Mellow-Roos Taxes, it is required that you are notified prior to purchasing.

About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.

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