What Is a Non-Ad Valorem Assessment?

Your property tax bill lists a number of charges. The largest item tends to be the property tax for your parcel. Frequently, other charges are assessed simply because you are a property owner in a certain local government district. These charges are known as non-ad valorem assessments.

Definition

Non-ad valorem assessments derive from the need of local governments to pay for services specific to certain neighborhoods -- services that are not necessarily shared across the entire region. To provide an equitable charge, these assessments are included in property tax bills to pay for non-property services, which can include drainage, landscape services, police and fire response or garbage collection. Many times, individual assessments are no more than $100 a year, but they get tacked on to an annual property tax bill, raising it by hundreds of dollars.

Mello-Roos Districts

For tax purposes, special residential districts in California are determined by vote to be Mello-Roos districts, named after the politicians who authored the law. These taxes work the same way as non-ad valorem assessments, in that they are frequently charged through property tax bills. However, they have nothing to do with the parcel of property. Instead, Mello-Roos charges finance major costs incurred developing the community, often paying for roads, landscaping, irrigation, government response services, and pest control.

Failure to Pay

Penalties for not paying non-ad valorem assessments are imposed in the same way as penalties for nonpayment of property tax. A lien is placed on the property, including any structures built on it. If the lien sits for too long, the local government can then force a sale of the property to recover the taxes owed. It is in the best interest of the property owner not to become delinquent in payment of taxes.

Calculation

Non-ad valorem taxes are not calculated based on a specific property value. Unlike traditional property taxes, which tend to be a percentage of assessed value, non-ad valorem charges are predetermined by other factors. The figure can be a split on the number of units in a district that benefit from the service charged, an arbitrary figure or a cost determined by an electoral vote, such as a bond measure.

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