What Every Homebuyer Should Know Before Purchasing in a CDD Community
Many Florida homebuyers are surprised when they discover a Community Development
District (CDD) fee listed on a property tax bill.
The good news is that a CDD is not automatically a bad thing.
In many cases, the roads, amenities, landscaping, and community features that attracted you
to the neighborhood in the first place were made possible because of the CDD.
Understanding how a CDD works can help you make a more informed homebuying decision
and avoid surprises later.
VETERAN TIP
Before making an offer on a home, ask your Florida's VA Mortgage Center Loan Officer to
review the property's estimated monthly payment, including any CDD fees.
A home with a lower purchase price may actually have a higher monthly payment if the
community has significant CDD assessments.
Knowing the full payment upfront helps you make a better decision before you write a
contract.
WHAT IS A CDD?
A Community Development District (CDD) is a special-purpose local government authorized
under Florida law.
CDD communities are commonly found throughout Florida, especially in newer masterplanned
developments.
The purpose of a CDD is to finance, construct, operate, and maintain community
infrastructure and amenities.
Rather than requiring a developer to pay for all improvements upfront, the CDD can issue
municipal bonds and repay those costs over time through annual assessments collected
from property owners.
WHAT DOES A CDD PAY FOR?
• Roads and sidewalks
• Streetlights
• Stormwater management systems
• Water and sewer infrastructure
• Community landscaping
• Parks and playgrounds
• Clubhouses
• Swimming pools
• Fitness centers
• Walking trails
• Recreational facilities
Many of the features that make a neighborhood attractive are often funded through the
CDD.
HOW ARE CDD FEES PAID?
CDD fees are generally collected through your annual property tax bill.
The assessment typically appears as a separate line item under Non-Ad Valorem
Assessments.
Unlike property taxes, which can fluctuate based on property values and tax rates, many
CDD assessments are tied to bond repayment schedules established when the community
was developed.
HOW MUCH DO CDD FEES COST?
CDD fees vary significantly from one community to another.
CDD assessments commonly range from approximately $1,000 to over $3,000 per year,
although some communities may be higher.
Always verify the actual CDD assessment for a specific property before making an offer.
100% DISABLED VETERANS: IMPORTANT CDD FACT
One of the most common misconceptions we hear is:
'I have a 100% VA disability rating, so I won't have any property taxes.'
While Florida's 100% Disabled Veteran Property Tax Exemption can eliminate the Ad
Valorem portion of your property taxes, it generally does not eliminate CDD assessments.
CDD fees are typically classified as Non-Ad Valorem Assessments and remain payable even
when the value-based property taxes are fully exempt.
Example:
• Ad Valorem Property Taxes: May be reduced to $0
• CDD Assessment: Still owed
• Other Non-Ad Valorem Assessments: May still apply
This is one of the reasons it is important to review the property's current tax bill before
making an offer.
A Veteran purchasing a home with no CDD may have dramatically lower annual expenses
than a similarly priced home located in a community with significant CDD assessments.
DO CDD FEES EVER GO AWAY?
Sometimes.
Many CDD communities issue bonds with repayment periods that commonly range from 15
to 30 years.
Once those bonds are paid off, portions of the assessment may be reduced or eliminated.
However, operational and maintenance expenses may continue even after the bonds have
been repaid.
CDD VS HOA
The CDD typically funds and maintains infrastructure and large community amenities.
Examples:
• Roads
• Sidewalks
• Streetlights
• Pools
• Clubhouses
• Parks
The HOA is a private organization responsible for enforcing community rules and
restrictions.
Examples:
• Architectural approvals
• Exterior appearance standards
• Parking rules
• Lawn maintenance requirements
• Community covenant enforcement
COMMON MISCONCEPTIONS
Myth: A CDD is the same thing as an HOA.
Reality: They are separate entities with different responsibilities.
Myth: A CDD is always a bad deal.
Reality: Many Florida communities with desirable amenities utilize CDD financing.
Myth: CDD fees are hidden.
Reality: CDD assessments are public record and generally appear on the annual tax bill.
Myth: Every Florida subdivision has a CDD.
Reality: Many communities do not have a CDD at all.
BEFORE YOU MAKE AN OFFER
Ask your Florida's VA Mortgage Center Loan Officer to verify:
• Whether the property is located in a CDD
• The annual CDD assessment amount
• Whether the community also has an HOA
• The estimated total monthly housing payment
• If you have a 100% VA disability rating, which portions of the tax bill may still remain
after your exemption is applied
Veteran Tip: A home with a $350 lower mortgage payment can easily be offset by a large
HOA and CDD fee. Always compare the total monthly payment, not just principal and
interest.