3 Things To Help Avoid High Tax Rates in Temecula Housing

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3 Things To Help Avoid High Tax Rates in Temecula Housing

One of the most important things when buying a house in Temecula or Southern California is To learn the communities and verify tax rates. Some communities can double your tax rate, going from 1.1% up to 2%. These special assessments or Mello-Roos taxes can be killer, especially if you’re the type of person that likes to use the disposable income for travel, nights out, or even more important, saving for retirement.

In this blog post and video, we’re going to talk about how to avoid high rates in Temecula or Southern California in general. As a real estate broker, I feel that one of the most important things I can do for buyers is to give them options and explain the pros and cons of each home and community. Your tax rate is a HUGE part of that! Having a payment every month that you feel comfortable with is very important.  

Everyone knows that money can be one of the biggest benefactors to added stress in your life or relationship. Homes are already going to be the biggest investment of your life, so adding thousands of dollars in tax a year on to that investment might not be the best option for many people. 

“Never buy a house at the price the bank approves you at, buy a home at a payment that you feel comfortable with.” Joel Daniel Broker Greenleaf Real Estate lol

What are Special Assessments or Mello Roos??

 Let’s say a home builder wants to build a new community in Temecula. The city of Temecula is going to tell them they need schools, roads, sidewalks, streetlights, etc. The builder of course does not want to take on the debt of building all the infrastructure for the new community so they pass this along in way of Mello-Roos or Special Assessments to the homeowners. 

General Rule of Thumb

I don’t know how this works in other states but the newer the home the higher the tax rate in Southern California. San Diego County, Riverside County, Orange County, and Los Angeles County are all going to have a base tax rate of around 1.1%. If a home is built after 2005, expect an added tax of anywhere from .4% up to 1%

Proposition 13

Proposition 13 is a huge advantage for Temecula homeowners. California’s home prices when compared to the rest of the country are more like hills and valleys. A home that was purchased in 2010 in Temecula has doubled or tripled in value. This is one of the reasons Proposition 13 was introduced. If your Temecula home doubles in price in 7-8 years, that’s a ton of extra tax money coming out of your pocket. Proposition 13 limits or restricts the rate on assessment to 2% per year and limits taxes to 1% of the assessed value

Buy a home in Temecula with a lower tax rate 

This is straight common sense but buy a home in Temecula in a low tax rate community FYI, these homes are going to be a little bit older, built in the 80s to late 90s. There is a different look to homes built in the 80’s when compared to newer builds. 

I’m on the fence when buying older homes in some communities. Sometimes they have the orange-colored tile roofs that I don’t necessarily like. Inside, you’re going to have lower ceilings and less of an open floor plan than newer home builds. If you are okay with this, by all means, this is a great way to go. If you are looking for communities with low tax rates I produced a video and article called 4 Low Tax Rate Communities in South Temecula & The Ultimate Low Tax Rate Community in Temecula

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