Finances and Taxes of New vs Older Homes
There’s no doubt that you have many decisions to make as a home buyer including the decision to either buy a new home or an older home.
In our last blog post, we discussed the differences in floor plans between new homes versus resale homes. In part two, of this three-part series, we’re going to discuss finances and taxes you can expect to pay when you buy a new home or an older home.
When it comes to older or resale-based properties, the one thing you have to realize (at least in Southern California), is that you may be required to pay Mello-Roos.
What is Mello-Roos? Created in 1982, the Community Facilities District Act is a special assessment on top of your normal property taxes, that the builder took out a bond for to pay for schools, streets, infrastructure, fire departments, etc.
You will typically see Mello-Roos in a lot of the brand-new developments in Orange County and parts of Los Angeles as well. It might cost an additional $1,000 to $5,000 per year, on top of your normal property taxes.
If you plan on buying a home that was built between the 1960s and the1980s, the Mello-Roos on that home may be non-existent or expired. For homes that were built between the 1990s to today in Orange County, Los Angeles, and Southern California it most likely will have Mello-Roos.
Not All New Developments in SoCal Have Mello-Roos
Paying property taxes is a burden that every homeowner in Southern California has to pay but the truth is that most people don’t like paying more than they should, especially when it comes to Mello-Roos.
The good news is that there are some builders in SoCal that have built homes in recent years that don’t have Mello-Roos. Buyers who purchase those homes will have to pay just traditional property taxes.
Contact the Fred Sed Group
Do you have questions about Mello-Roos or are you interested in viewing homes for sale in Southern California? Contact the Fred Sed Group by calling us at (800) 921-9231 or connect with us online.