Plenty of our clients who look at newer communities such as Starkey Ranch, or Del Webb Bexley and ask “What is a CDD fee in Florida?” As new developments get built, many homes are in amenity-rich master-planned communities and housing developments with an HOA and/or a CDD. Learn about the pros and cons here in this short Video.

Video Highlights.

0:00 Lifestyle amenities and CDD fees.

0:28 CDD fees on Listings.

1:09 How is a CDD started- a developer bond.

1:35 Finding CDD fees on a Tampa Bay listing.

2:05 HOA- Homeowners Association fees on a listing- and what they cover.

2:50 Pasco County Property Appraiser: Ad Valorem and non-Ad Valorem taxes.

3:35 Can CDD fees go up? Starkey Ranch CDD fee example.

4:10 What does a CDD fee cover?

What is a Community Development District?

Community development districts (CDDs) are created under Florida Statutes Chapter 190.  A CDD is established by a local governing authority, such as a county or municipality. They finance all the infrastructure, and provide services to support new neighborhood development. 

So why are they used? Well, the alternative is to raise the price of a house significantly when it’s built, and that’s usually more than buyers would consider paying up front.

The main purpose of a CDD 

The role of the CDD is to is twofold- and this shows up as two distinct parts of a CDD fee. Firstly, to finance, and secondly to manage the infrastructure. This can include things like roads, water and sewer lines, storm water drainage systems, parks, and other amenities. They have the authority to issue bonds and assess property owners within their boundaries to pay for these improvements. 

The revenues generated from these assessments are used to make:

1. Debt service payments on the bonds- that is paid off over 30 years.

2. To fund operations and maintenance of the infrastructure, like getting the grass cut and the playground repaired.

These are two separate fees- the debt service remains constant, but the operations and maintenance part can go up each year. 

CDDs are governed by a board of supervisors, which is typically made up of residents who live within the district, so it’s something you could volunteer for. 

The board sets the annual budget and property tax rate, approves debt, and hires a professional staff to manage day-to-day operations.

While CDD’s are created by local governments, they are separate legal entities with their taxing and bonding authority. As such, they aren’t subject to the same rules and regulations as other areas of government. For example, CDDs aren’t required to follow the competitive bidding process for purchasing goods and services.

What Buyers Need to Know about Living in a CDD Community

CDD assessments are made against all property within the district and are in addition to regular ad valorem (property) taxes. The fee is collected in your annual property tax. Watch the video for details on looking that up online!

Assessments are often a significant cost and in some cases, your assessment may be more than your mortgage payment. As a  home buyer, you need to understand these assessments and factor them into your decision-making process.

If you have any questions about any aspects of Florida real estate, please contact us we are happy to hear from you