How Long Does a Mello Roos Tax Last?

Mello-Roos is a special tax levied on properties located within a Community Facilities District (CFD). These districts finance public improvements and services in new or developing communities, such as roads, schools, parks, and essential services like police and fire protection. This article explores the typical duration of these taxes and how property owners can determine their specific end dates.

How Mello-Roos Duration is Established

Mello-Roos taxes repay bonds issued by a Community Facilities District (CFD). These bonds provide upfront funding for public improvements and services. The tax duration is directly linked to the bond repayment schedule. Property owners continue paying the special tax until the bond obligations, along with administrative costs, are fully satisfied.

The initial duration is determined when the CFD is formed and the bonds are issued. While the Mello-Roos Community Facilities Act of 1982 (Government Code Section 53311) permits a maximum term of up to 40 years from bond issuance, actual durations are typically shorter, often 20 to 30 years.

Factors That Can Affect the End Date

Several factors can influence a Mello-Roos tax’s end date. One factor is the early payoff of the underlying bonds. If a CFD collects more revenue than anticipated, perhaps due to rapid development or efficient financial management, it may retire its bond debt ahead of schedule. This accelerated repayment can result in the Mello-Roos tax concluding sooner for properties within that district.

Refinancing of bonds can also alter the repayment schedule. Refinancing, often done to secure lower interest rates, may lead to minor adjustments in the tax’s duration. Some Community Facilities Districts offer property owners the option to prepay their individual Mello-Roos obligation. This allows a homeowner to eliminate the tax for their specific property, even if the CFD’s overall bond obligation continues. This prepayment option is not universally available and depends on the specific terms set by each CFD.

Finding Your Property’s Mello-Roos End Date

Several resources are available to determine the specific end date for Mello-Roos taxes on your property. The annual property tax bill is often the most accessible source. It typically lists Mello-Roos charges under “special taxes” or “Community Facilities District (CFD),” along with a contact number for the district. This contact information can lead to further details regarding the bond series and projected maturity date.

Another avenue for information is the county assessor or auditor-controller’s office. These offices maintain records of Mello-Roos districts and can provide specific information related to the CFD impacting your property. Beyond these local government entities, the Community Facilities District itself is often a source of detailed information. Many CFDs are required to make public information available, which can include bond issuance and maturity dates.

When a property is purchased, the preliminary title report or the final title policy typically discloses any existing Mello-Roos obligations. This report provides an overview of recorded liens and assessments against the property, including Mello-Roos taxes and their terms. Consulting these documents is a standard practice during real estate transactions to understand ongoing financial commitments.