Avila Ranch home buyers to get hit with $2,000-$3,000 yearly tax

Home buyers who purchase properties at the planned Avila Ranch development near the San Luis Obispo airport will get assessed with a special tax of $2,000-$3,000 a year on top of their property taxes. [Tribune]

The community facilities district tax, or Mello-Roos tax, will be the first of its kind in the history of the city of San Luis Obispo. The tax is the product of deals between the city and county of San Luis Obispo over the area near the airport.

In 2008, the city annexed about 620 acres in the area, and as part of the annexation deal, agreed to a tax-sharing agreement that prevents the city from collecting property taxes at the location of the Avila Ranch development. The city and county, however, are discussing possibly restructuring the agreement.

Homes at the Avila Ranch development are priced between $250,000 and $750,000, with most falling in the $350,000 through $650,000 range. When the home buyers receive their property tax bills, they will be assessed the standard 1 percent tax, of which about 40 percent of the revenue will go to San Luis Coastal Unified School District, 35 percent to the county and the remaining 25 percent to different special districts.

The community facilities district tax will also appear on the property tax bill, and when combing the two taxes, Avila Ranch homeowners will be paying a rate of 1.45 percent.

Revenue from the special tax will go toward a variety of city services, including park and open space management, lighting and street maintenance, police and fire protection and flood and storm management. Additionally, some of the revenue will go toward reimbursing Avila Ranch developer Andy Mangano, who is required to pay $57 million toward project-related infrastructure. Mangano will be owed reimbursements for infrastructure projects that are not part of his “fair share” of costs.

The special tax is expected to take effect in 2018-2019, prior to the homes being constructed in late 2019 or early 2020. Critics say the tax is too steep a price, and it defeats the point of Avila Ranch homes being considered affordable housing.