Should I avoid buying a house with Mello Roos?

What is Mello Roos, and should I avoid houses that have it?

Mello-Roos is a type of special assessment tax in certain areas of California to pay for public infrastructure and services related to new developments. The tax is used to pay for things like roads, schools, and parks in the community.

The rate and duration of the tax can vary but typically lasts between 20-40 years. After the set duration of the tax, it will no longer be collected, so it will go away. However, it can be extended or renewed if the infrastructure and services still require maintenance or improvement. The tax will be added to the property tax bill, and so it will be passed on to the property owners for the duration of the tax.

Here’s the thing, though – all properties have some special assessment taxes and Mello Roos is one of them. Mello Roos payments can be very minimal or very large (over $500 per month), so don’t be scared off just because a home has Mello Roos, but definitely find out the total of the special assessment taxes and make an informed decision based on that.

Happy house hunting!