California Property Tax & Mello-Roos Assessments – State Income Tax Filings Starting January 1, 2013

CA PROPERTY TAXES

California government has money and budget challenges – and is expected to crack down next year – for tax year 2012 – on property tax payers who have been taking the entire amount they pay (including Mello-Roos and special assessments) as deduction from California state income taxes.

Starting with 2012 tax bill (the one due in April 2013), the CA state Franchise Tax Board (re income tax) will require property owners to break down their property taxes into deductible and non-deductible portions.

Income tax deductibility

So property owners who have been deducting their Mello-Roos fees and school bond fees paid (which are sometimes very large in amount) will no longer be able to deduct those or any other special assessments, such as vector control or mosquito abatement.

This is not new, and the difference between deductible and non-deductible property taxes and assessments on California income tax returns has been around for awhile.  
Mello-Roos fees, which pay for roads, schools, fire stations and other public facilities in new developments, have not been deductible from state income taxes since the legislature authorized the special assessments 30 years ago.

This change in policy by California Franchise Tax Board is important for some California property owners.  Many home developments at South Orange County had public amenities paid through Mello-Roos bond districts.

Home and property owners will not be able to use these special assessment payments as CA state income tax deductions starting for this tax year 2012 – for California income tax filings starting January 1, 2013.

Home Buyers Should Know

California property buyers and owners should consult with an experienced income tax professional or attorney about their own situation – possible CA income tax deductibility for buying and owning real estate in California.

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This is for information only and not the providing of legal or tax services.  If you are a California property buyer or owner, you should consult with an experienced income tax professional or attorney about your own situation – buying and owning real estate in California.

Please contact us about listing and sale of ORANGE COUNTY CA homes and real estate. ~ Professional REALTOR® agent representation and help for property owners, private trust estate representatives, estate administrators, executors and heirs, probate and trust attorneys, estate planners, income tax professionals, public guardians, fiduciaries, investor group managers, bankers, and individuals, with listing and sale of properties at Orange County, CA.

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About Harrison K. Long

Businessman, Real estate professional agent, GRI, Broker associate, Coldwell Banker Residential Brokerage - Orange County, California - CA BRE 01410855 - Helping property owners, estate trustees, executors and administrators, fiduciaries, bankers, investor group managers, with listing and sale of properties - helping people with their best decisions about homes and real estate - Orange County Association of REALTORs (now serving on its board of directors); California Association of Realtors (now serving on its board of directors); National Association of Realtors; attorney member of the California State Bar Association #69137 - Contact by telephone or text at 949-701-2515.
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