Mella-Roos can be confusing, and leave many, agents, buyers and sellers alike, a little lost. Some people hear of a Mella-Roos tax they don't even want to look at a property, when they are in fact missing out on a great opportunity.
Here's a few things you should know about Mella-Roos.
1. A 'Mella-Roos' district is more formally known as a Community Facilities District.
2. The Mella-Roos tax goes toward paying principal and interest on bonds used to help in the up-keeping of the district you are living in. This may include water, sewage, drainage and a bevy of other services. In essence, you are paying to help upkeep your area. It may be good to consider living in an area if their is more money going toward up-keep.
3. Mella-Roos DOES NOT change based on home values. It is a set price.
4. Mella-Roos is not permanent. You can check to see how long it will be in effect. It will only be in place until the principal and interest on bonds is payed back.
5. Mella-Roos costs may vary from year to year, but will not exceed the maximum amount specified when the district was created
6. When the property sells, the seller is no longer responsible. The tax applies to the housing. However, if seller did not make all of their Mella-Roos payments, it may cause problems and prevent the selling of the home.
A Special thanks to Frank Donato at First American Title for providing me with some of this great information!