Assessment Districts, CFD's & LMD's
In addition to the 1% property tax under Proposition 13, there may be additional taxes or annual assessments on a property if that property is in an Assessment District (AD), Community Facilities District (CFD), or a Landscape Maintenance District (LMD). Generally speaking if a property was constructed after 1985 chances are it will have one ore more additional annual tax or assessment for an AD, CFD or LMD.
Assessment Districts and Community Facilities Districts were formed prior to construction of new homes in order to provide upfront financing for significant infrastructure improvements such as construction of new sewer and water facilities which were necessary to service new development areas. Bonds were issued to provide the funding for these facilities and the bonds are repaid through an annual AD or CFD charge that is placed on the property tax bill. This will appear as a separate line item on the property tax bill and the entire property tax bill including any AD or CFD charge will be due at the same time as the property tax bill (1st installment delinquent December 10th of each year and second installment delinquent April 10th of each year).
The entire property tax bill by installment must be paid in full including any line time charges for a City’s AD, CFD, or LMD. Unless paid in full, the County Tax Collector will consider the property taxes delinquent and subject to late penalties and interest.
All Assessment Districts and Community Facilities District annual tax charges can be paid off at any time thereby eliminating the annual charge on the tax bill. These can continue from property owner to property owner upon sale of a property. Sometimes the buyer may negotiate the prepayment of any such AD or CFD to be paid off by the seller. In this way the buyer will not have these special charges as additions to all future tax bills. The seller however is under no obligation to pay off an AD or CFD as these can legally be transferred to the new owner. As such, the prepayment of any AD or CFD is solely a negotiable item between seller and buyer.
Most properties in Tracy constructed after 1985 are also subject to a special annual charge for the landscape maintenance. This LMD charge will appear as a special line item on the tax bill along with any charge for an AD for CFD. As per the above, this amount is included in the overall total property tax for the property and must be paid in full with each installment.
There are no bonds associated with the City’s LMD. As such, there is no prepayment option. The LMD charge will be transferred to the new property owner. The seller cannot prepay the amount nor can the new buyer prepay the amount.
For specific information regarding the amount of an AD, CFD or LMD charge on a particular property, the City has obtained the services of Wildan Financial to maintain this information. Please call Wildan Financial at 1-800-755-6864 for more information. Do not call the City of Tracy or the County Assessor for information regarding AD, CFD, or LMD charges. All such inquires should be directed to Wildan Financial.