If you’re considering buying a home in San Diego, you may have come across the term Mello-Roos tax. Understanding what it is and how it affects your property taxes can help you make an informed decision before purchasing a home.
What is Mello-Roos?
Mello-Roos is a special tax that applies to properties within designated Community Facilities Districts (CFDs). These districts were created under the Mello-Roos Community Facilities Act of 1982 to help fund public improvements and essential services, such as schools, roads, parks, and fire stations, in developing communities.
Instead of using general city or county funds, Mello-Roos taxes are levied on homeowners within the district to repay bonds issued for these infrastructure projects. These taxes are typically added to the annual property tax bill and can vary by community.
How Does Mello-Roos Affect Homeowners?
If you purchase a home in a Mello-Roos district, you will be responsible for paying this tax in addition to your regular property taxes. Here are some key things to know:
- Variable Costs: The amount you pay depends on your home’s location, size, and the infrastructure projects being funded. Some Mello-Roos taxes are a few hundred dollars per year, while others can be several thousand.
- Fixed Term vs. Permanent: Some Mello-Roos taxes have a fixed repayment period (often 20-40 years), while others may continue indefinitely to cover ongoing community services.
- Not Every Home Has Mello-Roos: Newer developments, particularly in areas like Carmel Valley, Pacific Highlands Ranch, Del Sur, and 4S Ranch, are more likely to have Mello-Roos taxes, whereas older neighborhoods may not.
How to Check if a Property Has Mello-Roos
Before purchasing a home, you can:
- Ask Your Real Estate Agent – They can provide information on whether a property is subject to Mello-Roos and how much the tax is.
- Review the Property Tax Bill – The tax bill will list any Mello-Roos assessments.
- Check with the County or City – The local tax assessor’s office can confirm if a property falls within a CFD.
Is Buying a Home with Mello-Roos Worth It?
While Mello-Roos taxes increase homeownership costs, they also contribute to well-maintained neighborhoods, better schools, and modern infrastructure. Many buyers find that the benefits of living in a Mello-Roos community outweigh the additional tax burden, especially in high-demand areas with top-rated schools and amenities.
If you’re considering a home in San Diego and want to understand how Mello-Roos taxes may impact your budget, feel free to reach out. We’re happy to help you navigate the details and find the right home for you!