Jenny Chaidez of Next Level Real Estate Services

What is Mello Roos and Why should Orange County Condo Buyers Care?

Orange County condo buyers currently living outside of California may wonder what Mello-Roos is, but it's a fact of life for many Orange County residents, especially for those in the southern most cities. Mello-Roos is an annual parcel tax that is assessed in addition to property taxes for civil improvements.

Since Mello-Roos is common in newer Orange County condo communities (generally those built after 1988), buyers need to be aware of these extra costs before choosing a place to live. Some of Orange County's most desirable neighborhoods have Mello-Roos. The details of Mello-Roos taxes vary widely.

Here's how Mello-Roos came into being. In 1978, the California legislature passed Prop 13, a measure that limits annual real estate property tax increases to no more than the rate of inflation. While it helps keep the cost of home ownership down, Prop 13 doesn't allow for new improvements. Funding for things like roads, schools, policing and additional infrastructure falls upon surrounding residences or the developer.

Mello-Roos, which is named after the two men who proposed the bill, passed in 1982. As a parcel tax, and not a property tax per se, it allows for the creation of Community Facilities Districts which raise money for new community improvements through bonds. Homeowners within these districts repay these bonds through an additional tax.

The length of a Mello-Roos ranges from 7-30 years and can increase at a rate of two to two and a half percent per year. However there may be other known scheduled increases for things like a new fire station that haven't occurred yet. Master planned developments like Ladera Ranch and many in others such as Irvine, Mission Viejo and San Juan Capistrano have Mello-Roos.

While some of the most amenity-rich communities in Orange County have Mello-Roos, some think the added premium for these improvements is too high. Here are a few Orange County condos with no Mello-Roos.

Briosa in Laguna Hills is a low-rise Mediterranean style condo community that was built in 1989-90. They come in flat and two-story townhome layouts with fireplaces and private decks. They're also close to The Irvine Spectrum Center, Whole foods, the 5 Freeway and Laguna Beach.

Cava in Anaheim is collection of attached three-story Spanish style 3-4 bedroom townhomes close to Buena Park. These spacious units were built in 2016 and have attached garages and desirable modern interior features like tall ceilings and windows, open floor plans and charming private covered terraces.

The townhomes at Woodbridge Cove are located on the North Lake Lagoon in the village of Woodbridge and offer buyers spacious 3-4 bedroom residences with attached garages and waterfront views. These units were built in the late 1980s and have access to the pools, parks, walking trails and a shopping center.

Whatever your preference, be sure to get full disclosure on Mello-Roos before buying. Mello-Roos may add features to your community that can keep property values up. So this added tax isn't always a cost to be avoided but you won't want to overpay for features either.  Contact us - we're Orange County condo experts!  - for more information.

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Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.

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Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.

Last Updated: 2021-12-04 06:49:36