Mello Roos, CFDs,1915 Bonds etc... AKA The New Home Tax

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irvinehomeowner

irvinehomeowner

Well-known member
So I've been looking at various new homes in Irvine and the cost of the extra taxes is almost beyond ridiculous.

The CFDs at Park Pavilion remind me of Villages of Columbus where you were looking at effectively a 1.8% tax rate.

While based on square footage, it just astounds me that whatever these bonds go to pay has doubled in the last 20 years when the number of units paying for it has also gone up. Back when Westpark II and some of the other newer home communities were being built, for 2500+sft homes, MRs were around $3000 a year. When Quail Hill was build, I think MRs were $4000 for the bigger homes and even Woodbury is at about $5000 for their large homes built in 2007-8.

But in Pavilion Park, larger home MRs are $7000-8000 and... can go up 2% a year. Is that new? Since when did ARMs move over to bond taxes?

I know everyone likes new, but with 2-3 years of that New Home Tax, you could probably afford an older resale and put that money into making it exactly how you want (well, except for vaulting the ceilings for ps9).

This is probably part of why the $1m+ homes are moving a bit slower... for us that's a big deterrent to purchasing newer (as it was back in the 90s when they started charging that "tax" in the first place).
 
It's not really any higher as a percentage of the home price as it was when we bought our house 15 years ago in Northwood Pointe.

The difference is that this tax can go up 2% per year and the older Northwood Pointe homes don't have that acceleration and the original homeowners were able to pay off one of the bonds (not the lower priced mello bond) thru escrow. I don't believe homeowners have the option to pay off any portion of that bond in Pavilion Park as the bond is only one bond with the school mello wrapped in it.
 
We paid less than the bond (we got credit for interest since we weren't paying it over time).

Offset it with not getting the tax deduction for paying taxes on a yearly basis, so not sure if it's a huge advantage but we have broke even on it.

Our taxes can only go up 2% a year (minus the mello school bond which for us is a fixed $685).

I know we live in a 15 year old house which is too big for us, but seeing what the taxes are for a new house is a sticking point for us. But.......... when I look at it, I think......... our taxes were the same percent when we bought 15 years ago, so I can't really say they are ridiculous high.

 
Ready2Downsize said:
It's not really any higher as a percentage of the home price as it was when we bought our house 15 years ago in Northwood Pointe.
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Sure... but unlike property tax, CFDs aren't really a percentage anyways. New home sales likes to cite the percentage number because it's better than saying "You are paying $7000 extra per year".

What I'm getting at is although real estate is more than double (or triple) the cost of 20 years ago (in Irvine), I don't think CFDs should be -- as those costs would not have appreciated at the same rate.

I do think that 2% per year proviso is to accommodate that Great Park funding if 5 Points is allowed to add 5000 more homes as they did state they would pass part of that cost to the homeowners.
 
Pavilion Park bonds pay for the Great Park. Do I think it's is fair that the Great Park is being paid for by a relatively small group of people and can be used by anyone? No.

Another stickler for us is the Pavilion Park HOA dues and the amenities. The HOA dues seem pretty high for a non gated neighborhood. The only thing I can think to account for that level is that the park is being supported solely by the homeowners in a non gated community. Anyone can come in and use the park. 15 years ago, the city paid for non gated parks.

Do I think that is fair? An even bigger resounding NO, but what can we do? Anyone who wants a new home in Irvine is going to have to pay for what in only the recent past was supported by a bigger base of people, namely the city.

I'll be interested to see if the city can find another reason to add a big bond to Orchard Hills which I think isn't responsible for the Great Park funding.
 
Ready2Downsize said:
I'll be interested to see if the city can find another reason to add a big bond to Orchard Hills which I think isn't responsible for the Great Park funding.
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OH already has a big bond (a massive one actually) attached to it by TUSD.

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It's a $90 million bond just for the school.  Expect at least another bond for infrastructure improvements.  Price of the homes isn't released yet.
 
Question for folks familiar with how the Mello Roos tax and bonds work.  At Pavilion Park all the information sheets state that the HOA is around $193/month now but at build out will be anywhere from $138-$193.  Why the range and what goes into the final HOA to determine if it will be at the high or low end of this range? 
 
But doesn't OH have more homes planned than PP? If that is true, the bonds per home could be less in OH than PP.

I'm not that interested in the school bonds but rather what is OH going to have to pay infrastructure wise? PP pays for the Great Park. I'm wondering if the city of Irvine is going to say....... hmmm... well PP managed to sell the houses with those GP bonds, so maybe we can push thru some big bond covered by home buyers in OH.

If there isn't a big bond like that, it's possible that down the road even tho OH homes are more expensive, the taxes might not be any higher and potentially lower than some of the homes in PP.
 
PP actually doesn't pay for the park.  PP is in improvement area 1 and has a $100 million bond.  Improvement area 2 has a $1.5 billion (with a b) bond.  That will pay for the park.

 
This is what Hawthorn sent me regarding the taxes on the home on lot 33:

Property is located in Tax Rate Area 026-239

Agency Type Tax Rate (% of Projected Sales Price)

AD VALOREM TAX ASSESSMENTS

(a) GENERAL 1 % County Tax General Tax Rate 1.00000%

(b) METRO WATER DISTRICT?MWDOC 1205999 Water District Bond 0.00350%

TOTAL FULL VALUE RATE 1.00350%*

SPECIAL ASMNT DIST DEBT SERVICE

(c) IRVINE RANCH WATER ID #212 WATER BOND Water District Bond 0.07452%

(d) IRVINE RANCH WATER ID #250 SEWER BOND Water District Bond 0.03600%

(e) IRVINE RANCH WATER ID #112 SEWER BOND Water District Bond 0.03168%

(f) IRVINE RANCH WATER ID #105 SEWER BOND Water District Bond 0.01980%

TOTAL RATE ON LAND VALUE ONLY 0.16200%*

TOTAL TAX RATE 1.16550%

DIRECT LEVIES (SPECIAL TAXES &

ASSESSMENTS, FIXED CHARGES, ETC.) ESTIMATED LEVY AMOUNT

(g) CITY OF IRVINE CFD 2013?3 (GREAT PARK) IA 1 Mello Roos CFD $5,902.00

(h ) METRO WATER DISTRICT STANDBY CHARGE Water Standby $10.08

(i ) MOSQUITO, FIRE ANT ASSESSMENT Pest Control $5.02

(j) VECTOR CONTROL CHARGE Health & Welfare $1.92

(k) CITY OF IRVINE LLD NO. 1 Landscape & Lighting $103.61

(l) IRVINE USD RECREATION ASSESSMENT Landscape & Lighting $56.56

FIXED CHARGE TOTAL ESTIMATE $6,079.19

I assumed that meant that the special assessment for this neighborhood includes money to pay for the Great Park.
 
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