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Greetings from Jennifer Ross -  Realtor
 
What Is Mello-Roos?  
 
Background
In 1978 Californians enacted Proposition 13, which limited the ability of local public agencies to increase property taxes based on a property's assessed value. In 1982, the Mello-Roos Community Facilities Act of 1982 was created to provide an alternate method of financing needed improvements and services. The name Mello-Roos comes from its co-authors, Senator Henry Mello and Assemblyman Mike Roos.
 
The Mello-Roos Community Facilities Act of 1982
The Act allows any county, city, special district, school district or joint powers authority to establish a Mello-Roos Community Facilities District (a "CFD") which allows for financing of public improvements and services. The services and improvements that Mello-Roos CFDs can finance include streets, sewer systems and other basic infrastructure, police protection, fire protection, ambulance services, schools, parks, libraries, museums and other cultural facilities.  
 
Why is a Mello-Roos CFD Needed?
A CFD is created to finance public improvements and services when no other source of money is available. CFDs are normally formed in undeveloped areas and are used to build roads and install water and sewer systems so that new homes or commercial space can be built. CFDs are also used in older areas to finance new schools or other additions to the community.
 
How is the Annual Charge Determined?
By law, the Special Tax cannot be directly based on the value of the property. Special Taxes instead are based on mathematical formulas that take into account property characteristics such as use of the property, square footage of the structure and lot size. The formula is defined at the time of formation, and will include a maximum special tax amount and a percentage maximum annual increase. Depending on the year of construction, it can range anywhere from $25 to over $300 per month.
 
How Do I Pay My Mello-Roos Taxes?
In almost all cases, Mello-Roos special taxes are levied as part of the annual property tax bill. You should be able to find your Mello-Roos special tax as a line item on that bill. In rare cases, a Mello-Roos district will send out its own bill.
 
How Long Will the Charge Continue?
If bonds were issued by the CFD, special taxes will be charged annually until the bonds are paid off in full. Often, after bonds are paid off, a CFD will continue to charge a reduced fee to maintain the improvements.
 
Are Mello-Roos taxes deductible on your personal income tax return?
You cannot deduct Mello-Roos taxes if they are assessed to fund local benefits and improvements that tend to increase the value of your property. Mello-Roos taxes may appear on your annual county property tax bill with other deductible property taxes. That does not mean you can deduct the Mello-Roos taxes. You may only be able to deduct a portion of the total property tax shown on your bill.
Most of the time, you cannot deduct real estate taxes assessed for local benefits and improvements. However, you can deduct them if they are for maintenance, repair, or interest charges related to those benefits. Some examples of local benefits are sidewalks, streets, sewer lines, water mains, public parking facilities or other similar improvements.
To deduct local benefit taxes, you must be able to show the amount of the taxes that are for maintenance, repair, or interest. If you cannot show what part of the local benefit taxes are for these charges, you cannot deduct the taxes.
 
IMPORTANT TO KNOW:
Rights to Accelerated Foreclosure. It is important for CFD property owners to pay their tax bill on time. The CFD has the right, and if bonds are issued, the obligation, to foreclose on property when special taxes are delinquent for more than 90 days. Additionally, any costs of collection and penalties must be paid by the delinquent property owner. This is considerably faster than the standard 5 year waiting period on county ad valorem taxes.
Disclosure Requirement for Sellers. When reselling a property in a CFD, the seller must make a "good faith effort" to obtain a Notice of Special Tax from the local agency that levies the Special Tax, and provide it to the buyer.
News And Views  
 
California's Tax Credit monies may go fast
The $100 million allocated for California's first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.'s Economics team.  California's Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied.  However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.
C.A.R.'s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters.  It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit.  If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.
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San Diego bests California in new home sales figures
San Diego County new home sales and prices were strong in February compared to the rest of California, according to the California Building Industry Association/Hanley Wood Market Intelligence New Home Sales and Pricing Report.
While the state saw the median price of new detached homes dip to $352,990 in February from $386,000 the prior month, the San Diego/Carlsbad/San Marcos metro area had its median price hold steady at $531,945.
Year over year, the median price of a new home sold was up 11.8 percent.
The county also had its volume of new home sales rise 1.6 percent in February to 192 compared to January. The number of sales in February 2010 was 11.6 percent higher than February 2009.
San Diego was one of two metro areas surveyed that had sales and median price increases month to month as well as year over year.
Famous Quotes 
 
"Don't give up trying to do what you really want to do. Where there is love and inspiration, I don't think you can go wrong"
 Ella Fitzgerald
Kids Share Their Wisdom
 
Being a good friend is a twenty-four-hour job.
Jill, Age 14
 
The class in school I hate the most is the one I learn the most from.
Joanne, Age 10
Girl Cartoon 
If you do badly on a report card or test that you take home on a Friday, you should wait until Sunday night to ask your parents to sign it.
Hannah, Age 13
 
'Casserole is just another word for 'leftovers."
Elise, Age 14
 
One of the greatest gifts my parents gave me was their love for each other.
Jamie, Age 16
 
You should never surprise a cow when you are behind it.
Stefanie, Age 12
As always, feel free to give me a call 800-913-7677 with your real estate needs.  I appreciate your referrals. 

 
Signature

Jenn

Jennifer Ross

 
Experience Counts!
Over 21 years in
Real Estate sales
Serving all of San Diego
 
Office: 800.913.7677
Direct: 619.985.7340
JennRossRealtor@gmail.com
 
 

Current Mortage Rates

 (BankRate.com weekly avg)
 30 yr fixed: 5.21%
15 yr fixed: 4.56%
 

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