Are there Mello-Roos Fees in Lake Tahoe – Truckee
When it comes to buying property
in the North Lake Tahoe – Truckee area, a common Tahoe Buyer question I am often asked about are about “Mello-Roos” fees and are there “Mello-Roos” Fees in Lake Tahoe – Truckee area.
- The answer is – that depends on where the property is located at. Yes, I know a non-committal answer, but location is a big part on who does, or doesn’t have a “Mello-Roos” Fee in the North Lake Tahoe – Truckee area.
In the greater North Lake Tahoe – Truckee, California area, we do have properties that will have a “Mello-Roos” Fee that will be on your tax bill. We also have a number of areas that do not have a “Mello-Roos” fee as part of their tax bill.
The discussion on “Mello-Roos” fees as a Tahoe Buyers’ agent typically comes up when I’m asked “How much will property taxes be on my Tahoe second home?” Both are taxes, but they are handled differently and have different rules on if they can be increased and how they are calculated.
- As a disclosure to anyone reading this blog post, I am not a tax professional, and this is not intended as tax advice, but is general information. When it comes to the nuts and bolts of property and “Mello-Roos” taxes I always recommend talking to a tax professional on any specific property.
You may not be from California, or from an area in the state that has a “Mello-Roos” fee, so
- What is a Mello-Roos Fee (tax)?
Special taxes for infrastructure, or for public services is not a new concept, but when they are tied to real estate ownership in California as an extra fee to be attached to a real estate parcel, it may be done through the Community Facilities Act, commonly referred to as a “Mello-Roos” fee.
In 1978, Californians passed Proposition 13, which limited the property tax rate and the ability of the state to increase the assessed value of real property.
Unlike other states, real estate in California is not re-assessed annually at its current re-sale market value. Instead it follows a specific set of rules outlined in Prop 13, which is initially based upon the original sales price.
As a way to generate additional funds, in 1982 the Community Facilities Act was enacted by the California State Legislature. The nick-name “Mello-Roos” came from the last names of the two co-authors of the bill – Senator Henry J. Mello and Assemblyman Mike Roos.
The Community Facilities Act was designed to provide a way for additional revenue and a way to generate special property taxes in a Community Facilities District (CFD) that could be attached to a parcel in addition to the state property tax bill if two-thirds (2/3) of the voters approved the proposed “Mello-Roos” tax.
Unlike California property taxes that are restricted by Prop 13, a “Mello-Roos” fee do not have those same Prop 13 restrictions and are not tied to the assessed value of the property.
A “Mello-Roos” fee is tied to a specific time period. They can last up to forty (40) years, but are typically set-up for a thirty (30) year period of time. A “Mello-Roos” fee can expire, or be extended with additional voter approval.
In newer communities, or a new real estate development it can be used as an alternative, or in addition to impact fees (fees imposed by local government on a new/proposed developments) paid by the real estate developer/owner for infrastructure and the cost of providing those public services into the new development. In this case, there may be a single owner, or developer voting to approve a “Mello-Roos” tax rather than the two-thirds (2/3) voter requirement.
In older communities, voters can extend an expiring “Mello-Roos” tax, or increase it, if two-thirds (2/3) of the tax payers approve it. This is often a way to cover revenue short-falls, or expand the number of properties covered by the tax.
A “Mello-Roos” District (also known as a Community Facilities District) is a specific geographic area (can be a city, county, a designated special district) where a special property tax on real property is imposed in addition to the regular property tax. In some areas of California it is referred to as a “CFD tax”.
Reasons for a “Mello-Roos”, or CFD taxes are for public services including streets, water, sewage and drainage, electricity, infrastructure, schools, parks, and police protection.
In the North Lake Tahoe – Truckee area we do have a few “Mello-Roos” areas with special taxes. Here are a couple of examples
- On the North Shore of Lake Tahoe there is a small “Mello-Roos” fee that is attached to properties in the North Lake Tahoe Public Utilities District (NTPUD):
- The communities impacted are Carnelian Bay, Tahoe Vista and Kings Beach. The “Mello-Roos” fee was for the “Recreation Funds and Parks”, which included the North Lake Tahoe Conference Center located in downtown Kings Beach.
- It appears on the tax bill as: North Tahoe PUD CFD#94-1 MR (FundNo: 69900) and was started in 1995. It is on-going today.
- In the Truckee area there is a “Mello-Roos” fee for the newer condos that have been built over the last ten years located in the new Northstar Village.
- Property impacted are the newer condos in the newer Northstar Village development.
- It appears on the tax bill as: Northstar CSD CFD #1 MR This is an example of a “Mello-Roos” fee being created from a developer.
Not every new real estate development will come with a “Mello-Roos” fee in addition to the regular tax bill, but when buying a second home/condo/lot in the greater North Lake Tahoe – Truckee area, it is always important to ask if the properties, or areas you like have a special “Mello-Roos” fee in addition to the traditional property tax before you make an offer.
After you’ve found a property, and have an accepted offer, California Civil Code does require a Seller to disclose to the Buyer the presence of a Mello-Roos tax. One way a seller may do this can be by purchasing a Natural Hazard Disclosure that includes this additional information.
Typically sellers will pay for a Natural Hazard Disclosure (NHD) report and selecting a company that also includes natural hazard information, but also provides additional disclosures for sellers on their property like the Mello-Roos tax information is an easy way to meet this required disclosure.
I typically recommend to my buyers and seller to provide a NHD report from Property ID because they do include additional property disclosure information, including one on the Property Tax Records for the property.
In addition to the line-by-line break-down on taxes, they provide a contact name and phone number so you can ask questions and learn more about each tax item.
In addition to the special “Mello-Roos” fee there will be additional line tax items that have been approved by voters. Being aware that some of our areas do have a special “Mello-Roos” fee, and other additional tax line items is the first step to becoming prepared for the Tahoe second home buying process.
Want to check out a specific property to see what tax items are included? If you know the county the property is located in you can view the current property tax bill (public record) for that property, and see all of the individual line item charges:
As a Tahoe second home Buyer, or Seller you are going to have a number of questions on the buying or selling process, so let me know how I can help you!
Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:
Want to see what condos are for sale in Lake Tahoe? Here are the current listings:
- Tahoe City Homes for Sale
- Tahoe City Condos for Sale
- Tahoe City Lakefront Homes for Sale
- Lake Tahoe Lakefront Homes for Sale
- North Shore Lake Tahoe Homes for Sale
- West Shore Lake Tahoe Homes for Sale
For all of your Tahoe real estate needs –
All information is deemed reliable, but is subject to change, and/or correction without notice.
Are there Mello-Roos Fees in Lake Tahoe – Truckee