Ladera Ranch Mello-Roos Explained.
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What Is Mello-Roos Tax?: Mello-Roos is a special property tax on real estate in Ladera Ranch (and other "newer" California cities) in addition to your normal property tax obligation. Basically it provides public financing through the sale of bonds for the purpose of financing public improvements and services (schools, parks, law enforcement, streets, water, sewage). The tax we pay is utilized to make payments of principal and interest on the bonds.
What is the Total Tax Rate in Ladera Ranch including Mello Roos?: The base property tax rate in Ladera Ranch is 1.1% (based upon the purchase price initially). When homes were first built, the Ladera Ranch Mello-Roos fee plus the base Prop 13 tax rate totaled about 2.0%. Mello-Roos, though, is not based upon the sale price of a home subsequently; the value or basis for a particular home was assigned when the home was first built. So, at current market levels you are not going to be paying a 2.0% combined tax rate when you buy in Ladera Ranch now. Ladera Ranch home values have risen dramatically (even considering the steep price drop experienced from 2007 to 2009) since they were built. The Prop 13 Tax (base tax rate) is based upon the sales price, so as your home appreciates and is sold, the new Buyer has to pay a higher property Tax. But, the Mello-Roos tax is not based upon the sale price and mostly stays constant even after years of appreciation. The effective tax rate (with Mello-Roos and base Prop 13 Tax) combined would be about 1.5% for a home purchased at $800,000.00
How Can You Estimate the Mello-Roos When Buying a Ladera Ranch Home? If you want to estimate the property taxes (combined) for a home that you are considering it is fairly easy. Before you make an offer you can estimate the Mello-Roos for that particular home. (It varies from community to community and even house to house. Simply take the quoted Tax Assessor yearly Tax amount and subtract the 1.1% of the Prop 13 portion of the tax from this amount. The remainder is a reasonable estimate of your yearly Mello-Roos payment for that home. Then take 1.1% of the offer price you intend to make and add the estimated Mello-Roos payment you just calculated. This will give you a robust estimate of the total property tax obligation on your new home.