California Association of REALTORS Scores Sacramento Victory  
by John Occhi, Hemet CA REALTOR  
Hemet CA Real Estate  

I was just reading through my email and saw an announcement that the California Association of REALTORS (C.A.R.) that legislation that C.A.R. is sponsoring is moving forward.

I thought that was a good thing and found the following synopsis of the new legislation:

"Several C.A.R.-sponsored bills continued to move forward in the state Legislature this month. Last week, AB 980 (Calderon), "Disclosure of Already Imposed Private Transfer Taxes," passed the Senate Transportation and Housing Committee. The bill will require a separate disclosure to potential home buyers as to whether the home they are considering purchasing requires the payment of a private transfer tax (PTT), the percentage of the home price constituting the PTT, the duration of the payment obligation, the recipient of the PTT payment, and an advisory that the cost and benefits of the "tax" should be considered when deciding whether to purchase the home. The measure also will require a separate disclosure to be recorded by the entity imposing the PTT; if they do not do so, the home buyer will not have to pay the PTT."

OK, I consider myself to be a pretty smart guy - but what are they talking about?

I THINK they are referring to Mello-Roos - but who really knows.  I never heard it referred to as a Private Transfer Tax - but that is the closest thing I can think of.

For those of you who do not know about Mello-Roos (not sure, but I think it is unique to California) it comes fro two developers - Mr Mello and Mr Roose.  They came up with the idea of creating a special type of bond that is now called Mello-Roos.  This bond is to cover the cost of the infrastructure of a new housing development.  So when you buy a house, all you are buying is ‘the house'.  Yes, the street and sewer and parks and all of the common areas still have to be paid for...and you will with a Mello-Roos payment.

Typically Mello-Roos is added to property tax which is why homes in new tracts are typically very close to 2% while homes in more established neighborhoods are much closer to 1%.

Pretty slick way to develop - it is common today.  The exception is the builder who pays for the infrastructure and divides that cost among all of the homes in the project - so it is paid for when the home is purchased.  Makes the homes a bit more expensive, but a lot less in property taxes.

If this is not a PTT then I am lost - can someone please help me?

If you want to find out about all of the C.A.R. sponsored and supported legislation, you can check out this page.

Now Have a Blessed Day,

John Occhi, Hemet CA REALTOR
Mission Grove Realty
Hemet CA Real Estate

PLEASE DON'T FORGET TO LEAVE YOUR COMMENTS BELOW