What is a CDD, and how can it affect my housing costs?

What does a CDD do?

Depending on its authorized powers, a CDD can finance, build, operate and maintain facilities such as drainage systems, roads or water and sewer infrastructure. Some districts have additional authorized powers for recreational facilities. Check the district's own records to see what it provides in your community.

What this means for a buyer

Do not assume the advertised mortgage payment or the seller's property-tax total shows every housing cost. Ask whether the particular home is inside a CDD and get the current charges for that parcel.

A CDD is a public government body; a homeowners association is a separate organization. A home may have charges from both. Ask which services each provides rather than assuming one payment replaces the other.

Two costs to ask about

A bond is a way for the district to borrow money. The payment used to repay that borrowing is often called debt service. A district's debt payments and ongoing maintenance costs are different things. Paying off one debt obligation does not automatically end maintenance costs or every other district charge. Ask the district for written information about any payoff options. Chapter 190: bonds

Where will I see the charges?

CDD special assessments may be collected on the county tax bill or through another lawful collection method. When listed on the tax bill, look for the district's name in the separate-assessments section. These are non-ad valorem assessments: they are not calculated by multiplying your taxable property value by a tax rate.

CDD law also allows value-based property taxes under specified conditions. Do not assume every CDD charge is an assessment, or that every district uses the same method. Homestead exemptions and assessment-growth caps do not reduce non-ad valorem assessments in the way they affect value-based taxes.

Charges collected on the tax bill generally follow the same discount and due-date rules as the rest of the bill. Check your bill.

Can the amount change?

Yes. The district's governing board sets its annual charges under the applicable rules. The operating budget, debt obligations and assessment method matter. A current bill tells you the current charge; it does not guarantee the amount for every future year.

A simple budgeting example

What does Parcelume include?

Parcelume estimates value-based property tax using its loaded rates and stated assumptions for supported properties. It excludes non-ad valorem assessments, including CDD charges billed that way. Check the official bill and district records for additional costs. Read the estimate's rate source, status and limitations; do not assume it includes every CDD charge.

Questions to ask before closing

• ›What is the district's name, and is this parcel inside its boundary?
• ›What are the current operating and debt charges for this parcel?
• ›Are there other charges billed separately?
• ›Are changes or additional assessments planned?
• ›Does my lender's payment estimate include these charges?
• ›How will this year's charges be divided at closing under my contract?

Ask the district about its charges and debt schedule, the Tax Collector about amounts collected on the bill, and your closing agent about contract disclosures and closing adjustments.