Confused by extra line items on your Tracy property tax bill? You are not alone. Many homes in Tracy and greater San Joaquin County carry special charges that sit beside the regular 1 percent base property tax. If you are buying new construction or selling a resale, understanding these charges can help you budget, price correctly, and avoid surprises at closing. In this guide, you will learn what CFDs and LMDs are, where to find them on your bill, how payoff and proration work, and how they affect affordability and pricing. Let’s dive in.
What CFDs and LMDs are
Community Facilities Districts, often called Mello-Roos, are created under the Community Facilities Act of 1982. Cities, counties, and districts use CFDs to fund public infrastructure like streets, utilities, and public safety facilities. The charge you see each year is a special tax, separate from the 1 percent base property tax.
Landscape Maintenance Districts are usually formed under the Landscaping and Lighting Act of 1972 or similar local authority. LMDs fund ongoing maintenance of medians, streetlights, irrigation, parks, and open space. These charges are special assessments that are based on benefit formulas, not property value.
Both CFDs and LMDs create a continuing lien on the property. The lien appears on the secured tax roll and is part of your annual property tax bill until it is satisfied or the district’s obligation ends.
Where they show on Tracy tax bills
In San Joaquin County, your secured property tax bill lists several sections. You will see the 1 percent base tax, any voter-approved debt, and then a section for direct assessments and special assessments. CFD special taxes and LMD assessments usually appear in that assessments section. Labels can vary. You might see “Community Facilities District,” “Special Tax,” “Landscape and Lighting,” or the district name and number.
If your parcel is in a CFD or LMD, the district name should be listed as its own line item along with the annual charge. The total amount due for each installment includes these special charges along with the base tax.
How to confirm your districts
Start with your secured tax bill
Pull the most recent San Joaquin County secured tax bill for the parcel. Scan the assessment lines for any CFD or LMD names and amounts. This is the quickest way to confirm membership and the current annual charge.
Use title and county resources
Ask escrow to order a preliminary title report. Title reports list liens and assessments and often name the district. You can also contact the San Joaquin County Tax Collector or Assessor to confirm active assessments, amounts, and billing patterns for the parcel.
For new builds, ask for the RMA
If you are buying new construction, request the subdivision final public report and the Rate and Method of Apportionment. The RMA explains how your CFD special tax is calculated for your specific lot. Builder disclosures should also call out special taxes and assessments.
Check City of Tracy for LMDs
Many LMDs are administered by the City of Tracy. The city’s public works or finance departments maintain LMD boundaries, budgets, and engineer’s reports. You can ask for the current levy schedule that applies to your parcel.
Paying, prorating, and prepaying
What happens at closing
At sale or refinance, escrow handles current-year property tax prorations and any unpaid installments for CFDs and LMDs. The seller typically pays the portion through the closing date, and the buyer takes responsibility for the balance of the year and future years.
Escrow and title companies coordinate directly with the county or district to confirm amounts due. Any unpaid installments are collected through closing and shown on your settlement statement.
Can you prepay or buy out
Whether you can make a lump-sum payment to remove future charges depends on the district’s legal documents. Many CFDs issued bonds to fund infrastructure. In those cases, the annual special tax secures the bond repayment. Paying off the obligation may require bond redemption under specific terms, which can be limited to certain call dates and can be costly.
Some districts have prepayment formulas or early redemption provisions. Some LMDs are pay-as-you-go and might allow a structured prepayment, but many do not. Do not assume prepayment is available. Always request a written payoff quote from the district or county.
How to request a payoff quote
If you want to explore prepayment, follow a clear process:
- Request a written payoff quote from the San Joaquin County Tax Collector or the district administrator. The quote should explain if prepayment is offered, the calculation method, and whether the lien will be extinguished.
- If the special tax secures bonds, ask for the trustee or bond counsel instructions. Redemption often requires the bond redemption amount plus accrued interest and costs.
- Have escrow coordinate any payment and ensure any required lien release is recorded.
Title insurance considerations
Title companies will insure title with the CFD or LMD obligation noted as an exception until it is paid. If you want assurance that no future assessments will be levied, you will need recorded evidence that the district lien was extinguished according to the district’s rules.
Budget and pricing impact
How assessments affect monthly cost
Special taxes and assessments are part of your recurring housing cost. Lenders commonly include them when reviewing your monthly obligations, which can reduce your qualifying amount for a mortgage. When you compare homes, include the annual CFD and LMD amounts in your monthly estimate.
Quick math you can use
Here is a simple way to translate annual special charges into a monthly impact and a rough change in purchase power:
- Step 1: Add the annual CFD and LMD amounts for the parcel.
- Step 2: Divide by 12 to get the monthly impact.
- Step 3: Estimate the purchase power effect using your loan’s payment factor.
Example for illustration only: If combined annual special taxes are 3,000 dollars, the monthly impact is about 250 dollars. With a 30-year fixed loan at 6 percent, a common payment factor is about 6 dollars per 1,000 dollars of principal. The estimated reduction in purchase power is 250 divided by 6, times 1,000, which is about 41,667 dollars. Your actual impact will vary with your rate, down payment, taxes, and insurance.
Seller strategy with special taxes
If your home carries higher annual CFD or LMD charges, highlight them clearly in your disclosures and MLS fields. Some buyers will adjust their offer price to reflect the ongoing cost. You may decide to set list price with buyer affordability in mind or offer closing credits rather than attempting a complex CFD prepayment. If a buyer asks about a buyout, get a written district payoff quote early and share it through escrow.
Buyer negotiation tips
When you compare two Tracy homes, include the special taxes in your math. A home with lower CFD and LMD obligations can be more affordable month to month, even if its list price is slightly higher. If you are financing, these recurring charges can shape your preapproval limit and offer strategy. In competitive situations, buyers with larger down payments or cash may be less affected. For most financed buyers, though, the monthly impact matters.
Practical Tracy checklist
For sellers
- Disclose all special taxes and assessments and include the latest property tax bill in your package.
- Provide the RMA and subdivision public report if you have them, plus any LMD budgets.
- If a buyer asks about payoff, request a written district payoff statement early and share it with escrow.
- Confirm prorations and any unpaid installments with escrow so closing statements are correct.
For buyers
- Confirm the exact annual CFD and LMD amounts for the parcel, not neighborhood averages.
- For new builds, request the final public report and the RMA; ask whether bonds were issued and about any redemption rules.
- If you want the option to prepay, ask for a written payoff quote and instructions from the district or trustee.
- Include annual special taxes and assessments in your preapproval and monthly budget.
For both parties
- Review the preliminary title report to see how the district liens are listed.
- Contact the San Joaquin County Tax Collector or Assessor, the City of Tracy for LMDs, and the district administrator for authoritative information.
- Consult legal and tax advisors about any proposed prepayment and the potential tax treatment of payments.
Final thoughts and next steps
CFDs and LMDs are common in newer and master-planned areas. They fund real improvements and services, but they also add to your monthly cost and can impact pricing and negotiation. If you are clear on what you owe, how proration works, and whether prepayment is realistic, you can make smarter decisions and move through escrow with confidence.
If you want help reading your Tracy tax bill, confirming district details, or modeling the impact on your budget or list price, reach out. I will coordinate with escrow, title, and the district so you get straight answers and a smooth close. Connect with Ranon Lanners to review your options and plan your next step.
FAQs
What are CFDs and LMDs on a Tracy tax bill?
- CFDs are Mello-Roos special taxes for infrastructure and services. LMDs are special assessments for landscape, lighting, and related maintenance. Both appear as separate line items on the secured tax bill.
How do I check if my Tracy home has Mello-Roos?
- Start with your secured tax bill and the preliminary title report. You can also contact the San Joaquin County Tax Collector or Assessor and request confirmation for your parcel.
Can I pay off a CFD before selling a Tracy home?
- Sometimes. It depends on district documents and bond rules. Many CFDs secure outstanding bonds, so payoff can require bond redemption. Always request a written payoff quote from the district.
How do lenders treat CFD and LMD charges in approvals?
- Lenders typically count recurring special taxes and assessments in your monthly obligations, which can reduce your qualifying amount. Include them in your preapproval planning.
Are CFD or LMD charges tax-deductible in California?
- Deductibility depends on the type of charge and your situation. Because rules are complex, ask a CPA or tax advisor for guidance before you file.
