11 Feb #52-How do Bonds and other FEES Financially Impact Real Estate
On the Ballot for the California Primary Election March 3, 2020 is another Proposition 13. Not to be confused with the Proposition 13 most of us associate with our property tax rate of 1% of purchase price, this new Proposition 13 relates to school BONDS issued by the State of California.
This bond that is on the ballot, while not increasing the State tax, and local taxes, is just another way for taxes to be raised on properties and is something you should consider when deciding if this is really something to be approved.
In looking at your current tax bill, pay attention to many of the bonds and levy’s that have already been incorporated into your property tax. This is on a local level. If the NEW Proposition 13 passes, this will be in addition and requires additional local funding to be approved in order to use these funds, thus potentially increasing property costs even more.
This NEW Proposition 13 also changes local funding rules for districts in the following ways
1) Districts will be allowed to issue higher amounts of local obligation bonds for schools..
2) Districts unable to raise the required $15 MILLION (up for $5 Million) could apply for additional funding
3) State would establish new developer fees.
The reason I am writing this today is because I had a home buyer whose lender recalculated his loan figures because of an approved BOND that was passed that impacted the taxes and fees being charged in a certain local city. When the calculation was over, it REDUCED the buyers buying power by almost $10,000. When buyers ability to purchase because of fees are impacted, it can impact the value a seller can attract for their home, and can sometimes also reduce the sale proceeds by having a buyer request these costs be paid off during the home sale.
Some fees can impact property values because they must be disclosed and used in the financial calculations for buyers who are applying for a loan. New construction is being impacted by multiple special fees including Mello-Roos and Community Facilities District fees, PACE loans, Solar Loans and Leases to name a few.
As you are considering any of these, please look at the LONG range effects and how it could AFFECT your ability to sell! If you would like to bounce some ideas around, PLEASE CALL or e mail me! Let’s Chat and remember to VOTE on March 3rd.