In additionto your monthly mortgage payment, you also need to consider some other taxes and assessments to get a true picture of what homeownership will look like for you. Each of these components will empower you to accurately predict and control your monthly expenses.
There are three components to these taxes: property taxes, direct assessments, and special assessments or Mello-Roos assessments. Every year, the city, county, and state all charge taxes on every parcel of real estate located within their borders. For many homeowners, these property taxes are the 2nd-largest home owning expense after mortgage interest.
In most areas, property taxes are governed by state law, but assessed and collected by the county on an ad valorem basis. Ad valorem is latin for “according to value.” These taxes are calculated annually. In addition to these direct assessments, you may also be located in a special assessment district or a Mello-Roos district.
In recent times, many cities have required developers to build and ensure long-term funding for parks, schools, and emergency services to directly benefit the subdivision. To prevent the influx of new homes from causing a drain on existing municipal services, special assessments are collected. A Mello-Roos district is an areas where a special tax is imposed on those 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 financing certain public improvements and services.
Mello-Roos taxes are in turn used to make payments on principal interest on the bonds and is collected with the general property tax bill. It’s also subject to the same penalties that apply to regular property taxes. This stays in effect until the bonds and the costs incurred are paid off, but it won’t exceed 40 years.
Both special assessment districts and Mello-Roos districts allow raw land to be used as collateral for bonds that are sold to investors. Those proceeds are then used to pay for public facilities.
About WILL COOK GROUP|Keller Williams Luxury Homes|BRE# 01879277
Ranked in the top 1% of all agents valley wide, Will is an Associate Broker and Team Leader of the WILL COOK GROUP at Keller Williams Luxury Homes
A native of Baton Rouge, Louisiana, Will attended graduate school in Boston and worked as a Medical Software Project Director focused on managing client expectations through sophisticated software implementation projects for many years. Will’s experience managing large scale projects in the corporate world has suited his transition to real estate over 15 years ago. Will’s mission has been to use integrity and accountability to exceed his client`s expectations. He has worked in the luxury markets of Boston and Miami Beach and has also owned his own real estate firm in Louisiana.
As expert real estate advisers serving the Palm Springs Area real estate market, Will and his team specialize in finding buyers great deals and they would love to help you find your very own slice of the California Desert!
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