Mello-Roos or No Mello-Roos, That is the Question

In the Santa Clarita Valley, we have a lot of homes that have a supplemental property tax above and beyond the normal rate of approximately 1.25%.

Called a Mello-Roos (MR), a Community Facilities District Act, and sometimes a School Bond.

What is it? :



A Mello-Roos District is an area where a special property tax on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing 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 paid is used to make the payments of principal and interest on the bonds.

And, should we buy a home that has one? Yes, that is the question today.

In newer construction, newer neighborhoods, that is where you frequently find them. And, remember, Santa Clarita is the 'town of new' so we find that supplemental tax here in several neighborhoods.

What if the house we find and fall in love with has a mello-roos tax? Well, it has to be included in the monthly PITI (Principal-Interest-Taxes-Insurance) to determine if you can handle that expense. And, you have to decide if that additional expense is worth it to you to have the home of your dreams.

Keep in mind, sometimes the MR is tax deductible, sometimes not....

Are Mello-Roos Taxes Deductible?

Ask your agent to determine what the monthly or yearly expense is and how long it is in effect for. Ask if it may change amount at any time.

My experience tells me that most clients don't like the idea of paying any extra property taxes. They want to buy their home and know that the majority of their monthly payment is going to the mortgage holder, not the tax man.

But, again, if your dream home has the MR, and it is affordable? Investigate, determine, decide and hopefully....enjoy your new home.....