All right, so if you're thinking about buying a home here in the city of Temecula, California, I think this is gonna be a really important video for you to watch. We're gonna talk about some of the high taxes that might affect you and the home that you're thinking about purchasing. We're gonna talk about special assessments, we're gonna talk about Mello-Roos and really what that means to you as a homeowner.

So let's go ahead and get into it.

Hey guys. Hey again. My name is Justin Short. I'm a realtor and team leader with the short real estate team here at Keller Williams in Temecula, and this video is all about. Taxes. Uh, we're gonna talk about property taxes and how some of the different property taxes affect different neighborhoods and might affect the type of home that you're thinking about purchasing and really how it's gonna affect your affordability.

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And I'm happy to answer any questions you may have to help point you in the right direction. Or of course, you know, I'd love to be, you know, a resource to, you know, help you out with your real estate search. So, you know, it's how I earn a living. So I'd love the opportunity to help you and your family. If you know, if not, hopefully at least this is good information for you.

So, um, we'll go ahead and kind of get into all the, all the info here. And again, we're gonna talk about the taxes and some of the high taxes that affect different homes here in the city of Temecula, California. So we'll kind of give you kind of the general lay of the land and give you, kind of, give you some, some specifics.

So if you are not familiar and, and this. This whole tax, you know, property tax situation and these different high tax rates, this is not something that's common in a lot of different areas. So when people are moving here, especially from like San Diego, LA, Orange County, and other areas that might be a little bit older.

Then the city of Temecula, they're not familiar with this at all. It's definitely, this is something that only affects homes that are, you know, relatively newer. And we'll talk about kind of some of the guidelines and things like that, and also even in different states, you know, when I have clients that are relocating here from, you know, from whether it's Texas or you know, Virginia or you know, Washington.

You know, Arizona or Nevada, wherever they may be from, a lot of times this is not an issue or that they are used to dealing with or something that they've encountered before. So it's definitely something that you want to pay attention to. I would say probably like 80% of the clients that I work with are not super familiar with this, these different types of taxes and, and what it means and, and how it affects them.

So if you're not super knowledgeable, most people are not. Your real estate agent should be able to help kind of guide you through this and give you the information, make sure you understand what you're trying to purchase and what you're wanting to purchase, and how that would affect you. Um, but I think it's, it's an important thing, you know, so, um, the, so general lay of the land, so in the city of Temecula, the, the entire city and really this is Riverside County and the entire county has more or less about the same base property tax rate.

Okay. So, um, I guess we're gonna talk a lot about numbers and kind of some specifics, so hopefully it doesn't. Bore you, bore you too much, but I, I think it's important. So more or less, you know, the base tax rate across the board is gonna be from about 1,1.5%. So just over 1% to about 1.15%.

Um, so I kind of just round up to everybody. I tell everybody, hey, the base tax rate in Riverside County is 1.15%. That can be a little inflated, depending exactly where you're at, but more or less, that's, it's a really good general lay of the land. So that would be your minimum. The property tax rate in Riverside County is about 1.15%.

Okay. so that a lot, most people are aware of that, you know, most people are used to paying property tax. It's very, very common. Right? Uh, pretty much I guess everywhere in the US or just about everywhere. Uh. So that, that's not, that's not like a deal breaker or earth shattering news, right? But what people are not familiar with is, in this city, in addition to that base tax rate, different neighborhoods will have different special assessments.

So what that means is these are additional taxes that are on top of that base, 1.15%. Uh, that. You will have to pay as a homeowner, and that amount will vary based upon the neighborhood that you're in, the year your home was built and you know where it's located. Okay, so. And this is why the affordability can change so much from people.

Let's say if you wanna buy a home that's $800,000, you might look at one home that's $800,000 that has a low tax rate. It's right about that 1.15%. And you look at a house across the street that has a higher tax rate, it might be 2%. Well, even though they're both $800,000 this home, that with the higher tax rate might cost you an extra $500 a month to purchase.

Right? And that, and that's a big deal, right? When most people are living. You know, whether it's paycheck to paycheck or month to month, or you, you have your fixed bills, right? An extra $500 that you were not prepared for or You know, we're not expecting it, is a big deal. So, uh, I think that this is something that's super important.

It's something you guys want to make sure you pay attention to. So I guess we'll, we'll kind of start with what are special assessments, you know, what does that mean? So the special assessments are kind of like the newer term that they are labeled as people used to refer to these as Mello-Roos. Um, so basically these are.

These are bond tax bonds that were put into place and attached to the property. Uh, they, they could have been voted in. Um, they were mostly put in place by the builder. Uh, but basically the, these are monies that were paid, uh, could be for, to build schools, to build parks, or most of them are actually for like the infrastructure.

So for example, when a builder, let's say KB Homes or any of these big nationwide builder goes in, they're gonna buy up a big plot of land. Let's say they buy up. 50 acres, you know, whatever it is, they're gonna subdivide it and they're gonna build houses. Okay, great. Uh, but when they, when they make that plan, they are not just building houses, they are also building infrastructure in order to build those houses.

So when they buy up that plot of land, they have to bring out sewer, they have to bring out water, electricity, that the city a lot of times is gonna mandate that they build parks, that they build fire stations, all these other types of things. So, all that infrastructure costs money. And what used to happen is the builders would go ahead and just kind of pay that as part of their cost to build and develop.

And what eventually started to happen is that the builders figured out that they did not necessarily have to foot the bill themselves and they could pass on that bill to the new homeowners that are gonna buy it as a new build. So whether that is. The entire portion of that cost to, uh, to develop right, and all the infrastructure, or if it's just a small percentage of that.

So it does vary, right? It could be a small cost, it could be, it could be a very, very large cost. But basically these are mostly infrastructure costs that the builder put in that are usually 20, 25, 30 year bonds that the homeowners are gonna pay on until, until they're paid off. So, um. Uh, in the general cost to that, what that is going to be as a homeowner, you might a, a low, you have your, your original low tax tax rate, which is at 1.15%.

Right? And then per year, you'll have a fixed dollar amount of those extra special assessments. So a low amount of special assessments might be, you know, a hundred dollars a year, $200 a year, $300, $400 a year, that type of thing. You know, if you look at $300, it's called $360, right? So if you pay that over a course of a year, if you pay your taxes monthly, that's gonna be, you know, it's, it's, it's not super, super significant, right?

Uh, just a few dollars a month that you're gonna go ahead and pay, you know, but if you are gonna have higher taxes, that bill might range up to 4 to $5,000 per year. Now that's super, super significant, right? So that's where it's gonna cost you an extra $400, $500 a month, and you're gonna pay those really, really high property taxes.

So. The general rule of thumb, if you aren't. Concerned about paying those extra higher special assessments is to pay attention to the year built, right? So each neighborhood is gonna be a little bit different. So it is something you gotta pay attention to. Your real estate agent is gonna have to check that for you and let you know kind of what the tax rate is for that specific home you're looking at.

But general, general rule of thumb, if it's an older home, let's say if it was built in the nineties or the very, very early two thousands or older, so might in the eighties, you know, whatever it is, those homes will typically not have the special assessments, or if they do, they're very, very, very low. So typically an older home, like pre, let's say 2003 and older, tends to have very little to no special assessments.

And then as you got to 2003 and newer, you started to have those extra higher taxes, those extra special assessments. So 2003 and newer, you might see an extra thousand dollars a year, $2000, $3,000 a year. And then the general rule of thumb is the newer the home gets, the higher those extra taxes, those special assessments are.

So, um, once, let's say 2003 to 2009, you know, you might be, you know. A couple thousand dollars a year, and then once you get up to say, 2010, you might be up to three to $4,000 a year. And then if you're up to 2020 and newer, it might be in north of $5,000 a year. So those are kind of some general ranges.

Again, each neighborhood is gonna be specific, but it's gonna really change your tax rate. Um, you're, you're gonna range from, you know, 1.2% all the way up to 2% per year in property taxes. And if you are not aware of this, it's definitely something that's going to affect you. If you're getting a mortgage, you know your lender's gonna need to know about this.

They're gonna have to help figure that out for you. Make sure you're gonna be able to qualify for this home, even with the higher taxes. Cause they're gonna factor that into your, your monthly payment. So those are definitely gonna be important things for you to pay attention to. Um, and then one extra bonus thing that I want to mention, and this is a newer thing for us in over the last few years now, is in addition to some of the different property taxes that are out there and some of those different special assessments.

When you're buying a home in this area, you also really wanna make sure you pay attention to your homeowner's insurance. Um, so homeowner's insurance rates have gone up quite a bit over the last couple years. I think most people realize, you know, there's been more and more natural disasters in California over the last decade.

Right? Over the last couple years there's been really, really significant buyers, and because of that Pretty much as a state, our homeowner's insurance rates have gone up. I know personally, um, you know, On our home, you know, we have seen the rates go up significantly more than more than double. Right. And I think most people that live here would be able to say the same.

So. If you are buying a home here, you want to make sure that you are getting a quote for your homeowner's insurance. Uh, you will typically do that during the escrow process if you want to be a little bit more proactive. You can get quotes before you even submit an offer on a home, or even before I have some clients to do it before we even look at it because it's been an issue in the past.

Right? So, um, those are, that is something you can do, be a little, to be a little bit more, more proactive to make sure that it doesn't have some of these higher rates. But basically, you know, a lot of. Insurance companies have stepped outta California. They're no longer writing new policies. And so it's limiting, you know, what the, what insurance companies you can go with.

So there's less competition. So, you know, pricing tends to be higher. And there's even some different state backed plans. You might be familiar with the, you know, California Fair Plan. Uh, that tends to be kind of like your worst case scenario, but they tend to have some higher rates as well.

So basically you also wanna make sure that you pay attention to your homeowner's insurance rates. 'cause that's, that's gonna be important. So, um, anyways, uh, yeah, I have more information on that, but you guys can reach out and give you some details and I can give you a reference to a really good local broker, uh, that I would highly recommend as well.

So, um, you know, hopefully it's good information for you guys. Pay attention to property taxes. It's gonna depend on the neighborhood. You wanna make sure you are not turning a blind eye to that and really paying attention to what you are hoping to purchase. And you also wanna make sure you have an eye on those homeowners insurance rates.

So, um, anyways, feel free to reach out if you have questions, you can call, you can text, you can email, and hopefully talk to you soon. Thanks.