South Orange County went through a significant growth period starting in the 1980's. In the early 1990's land developers needed a way to fund the extraordinary amount of public improvements that were necessary to support this growing population. They created a funding mechanism called CFD's - Community Facilities Districts (Mello Roos Districts). Bonds were used to fund these public improvements, with the bonds paid back by homeowners through a special tax assessment included in the property tax bill. These special taxes vary from community to community.

There is conflicting information and opinion on whether Mello Roos taxes are tax deductible. Generally only "ad valorem" (based on value) property taxes are deductible. Mello Roos taxes are not ad valorem, they are flat taxes.  A CPA should be consulted on this matter.

For detailed information about Mello Roos assessments in Orange County, go to: OC MELLO ROOS