Buy a home at River Islands at Lathrop and the community amenities you expect will be built and maintained.

That is not necessarily the case in other cities in South San Joaquín County — the fastest growing region in California during 2022.

It’s because instead of a 1 percent basic property tax it is essentially doubled to 2 percent for River Islands at Lathrop homeowners by what might best be described as a maxed out community facilities district (CFD).

Under Proposition 13, the maximum property tax assessed is 1 percent. Additional taxes can be assessed — such as school bonds — if voters approve them.

That said, there is an overall 2 percent cap.

That means instead of a $7,000 annual property tax bill on a home  that is sold and therefore assessed at $700,000, there is a $14,000 annual property tax bill.

It also means that to quality for mortgages, those buying homes need to have income that can cover interest, principle, and the larger tax bill.

It is what allowed the first school in the 15,001-home development to open shortly after the first home was sold — a significant rarity in the annals of California tract home development.

It also is making possible the construction of the first phase of the $150 million River Islands High campus that ultimately will house 1,600 students that is now under construction

It is what will allow the development of multiple community facilities such as a football stadium, sports complexes and such that will be maintained not by the city or school district per se but CFD fees.

To make it work, Cambay Group is essentially plowing its profits from initial sales back into amenities.

That’s because CFD financing requires all of the lots that the cost of amenities are spread out over have to pay. As such, unsold lots that Cambay owns are required to contribute to the payment. The CFD burden shifts to the buyer when they purchase a home.

Cities such as Manteca, Ripon, Lathrop, and Tracy receive anywhere from 15 to 18 percent of every $1 collected in basic property tax. The variation depends upon when  property was annexed to a city.

Roughly 50 percent goes to schools with the county receiving 22 percent. The rest is split between Delta College and other special districts that serve specific areas.

Voters in Manteca could vote to tax themselves through a bond measure or agreeing to form a special CFD district for recreational amenities and such.

In the case of River Islands, the district was formed by the property owners — Cambay Group — before the first home was sold.

Mountain House, a planned community of 30,000 people just northwest of Tracy, is considered well positioned to eventually incorporate as San Joaquin County’s eighth city.

That’s because they have a funding mechanism in place that goes beyond the 1 percent property tax.

In Mountain House’s case, it is a special tax that translates into a 70 cent per square foot tax on all buildings including housing. There is an annual 4 percent cap on increases.

That means is someone buys a home valued at $1 million — of which a number of large tract homes have sold for on the resale market —and it has 4,000 square feet, the tax bill is $11,900.

That same $1 million house would have a $20,000 property tax bill at River Islands.

In Manteca, if there is no add on CFD for park maintenance and such, the annual property tax bill on a $1 million home would be $10,000.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com