| There is a lot of misunderstanding about | | | | the exact amount of the Mello-Roos tax. |
| Mello-Roos in Ladera Ranch. Simply stated, | | | | Before you make an offer you can also |
| Mello-Roos is a special property tax | | | | estimate the Mello-Roos for it does vary |
| assessment that is levied on Ladera Ranch | | | | somewhat from community to community and even |
| (and other cities) real estate within a | | | | lot to lot.. You take the quoted Tax Assessor |
| designated district. These Ladera Ranch | | | | yearly Tax amount, and subtract the 1.1% of |
| Mello-Roos districts are created to raise | | | | the Prop 13 portion of the tax from this |
| money by the sale of bonds, for the purpose | | | | amount. The remainder is a reasonable |
| of financing infrastructure improvements for | | | | estimate of your yearly Mello-Roos payment |
| that community. This infrastructure | | | | for that home. |
| improvements may include drainage systems, | | | | |
| sewer treatment, water lines, new streets, | | | | C.- Can I deduct my Ladera Ranch Mello-Roos |
| new parks, upgraded electrical lines, etc. | | | | taxes from my Income Tax? It is the opinion |
| The motivation for the creation of the | | | | of some tax accountants that the Mello-Roos |
| Mello-Roos tax started back in 1978 with the | | | | tax is not tax deductible. On the other hand, |
| passage of Proposition 13. Prop 13 limited | | | | I know of home owners in Ladera Ranch who |
| local governments ability to pay for capital | | | | have deducted their Mello-Roos tax from their |
| facilities and services by increasing | | | | income taxes. It is best advised that you |
| property taxes. In 1982, Senator Henry Mello | | | | consult with your tax advisor and make your |
| and Assemblyman Mike Roos enacted the | | | | own decision on this topic. |
| Community Facilities District (now called | | | | |
| Mello-Roos) to enable local governments with | | | | D.- How and when do I pay the Ladera Ranch |
| an another means to raise needed funds, and | | | | Mello-Roos Tax ? The Mello-Roos tax is |
| the first Mello-Roos district was created in | | | | included in your normal Prop 13 tax bill and |
| 1986. Below are some of the more common | | | | this is billed to you twice per year on |
| questions that are asked about Ladera Ranch | | | | February 1st and November 1st. |
| Mello-Roos: | | | | |
| | | | E.- How long do the Ladera Ranch Mello-Roos |
| A.- What is the Total Tax Rate in Ladera | | | | tax last ? The Mello-Roos assessment is |
| Ranch including Mello Roos ? When homes were | | | | written for about 15 to 25 years dependent on |
| first built, the Ladera Ranch Mello-Roos fee | | | | the community facilities district. Many of |
| plus Prop 13 base tax totaled about 2.0%. | | | | the districts have the right to renew the |
| Prop 13 base property tax is approximately | | | | Mello-Roos tax if needed, so it is prudent |
| 1.1% of the purchase price and the Mello-Roos | | | | not to assume that this tax will disappear |
| portion of the tax was approximately an | | | | during your ownership |
| additional 0.9%. One important distinction | | | | |
| is that the Prop 13 Tax is based upon the | | | | F.- How do I compare the value of a Home with |
| sales price, so as your home appreciates and | | | | Mello-Roos against a Home without? As an |
| is sold, the new Buyer has to pay a higher | | | | example, let's say you are thinking about |
| property Tax. But, the Mello-Roos tax is not | | | | buying either a home in Ladera Ranch with |
| based upon the sale price and mostly stays | | | | yearly Mello-Roos payment of about $1,800, or |
| constant even after years of appreciation. | | | | possibly buying a home in Laguna Niguel with |
| Due to the strong appreciation that Ladera | | | | no Mello-Roos. To compare the values of these |
| Ranch has experienced since the homes were | | | | two homes, take the $1,800 yearly Mello-Roos |
| first built, the Prop 13 tax adjusts upwards | | | | payment, divide by 12 for the monthly payment |
| at bout 1.1% of the purchase price, while the | | | | of $150. A $150 per month payment is |
| Mello-Roos essentially stays fixed at | | | | approximately equal to a $25,000 mortgage in |
| approximately $2,000/year. So today, the | | | | today's interest rates. Therefore the home in |
| total property tax is around 1.5% for a | | | | Ladera Ranch is actually costing you about |
| $800,000 home. | | | | $25,000 more as compared to the home you're |
| | | | considering in Laguna Niguel. If the Ladera |
| B.- How does one estimate the Mello-Roos when | | | | Ranch home is still more desirable to you at |
| buying a Ladera Ranch home? During the | | | | a comparative price $25,000 higher than the |
| escrow period, the Seller is required to | | | | home in Laguna Niguel, then buy it, if not, |
| acquire a report which will state in writing | | | | buy the home in Laguna Niguel. |