Understanding Mello-Roos

If you have just bought a home in Orange County and have heard the term Mello-Roos thrown around, you may or may not understand what it is. A Mello-Roos District, also known as the Community Facilities District is a bit complicated, but simpler to understand when learning about its purpose.

Essentially, real property owners within a Community Facilities District will have a special tax imposed on them – this is the Mello-Roos District. For the purpose of financing specific public services and improvements, this district chose to seek public financing through the sale of bonds. Services that may be included in this are police protection to newly developing areas, parks, schools, infrastructure, electricity, sewage and draining, water, and streets.

As a result, the principal and interest on the bonds is paid by the taxes you pay to the district. Unfortunately, Proposition 13 limits don’t apply to Mello-Roos Districts because the taxes are uniformly and equally applied to all properties. Moreover, the special taxes are collected along with your normal property tax. However, residents within this district can rest assured that their special taxes are actually going toward bettering the community.

For more on Mello-Roos districts in Orange County, contact Judy Qualls.