If you are shopping new communities in Florida, you may see the letters CDD in a listing or a contract. A Community Development District can add a yearly charge on top of your property taxes and HOA dues, so it belongs in your budget before you sign.
What a CDD is
A CDD is a district created under Chapter 190 of the Florida Statutes. It can levy taxes or assessments to pay the construction, operation and maintenance costs of certain public facilities and services of the district. Its governing board sets the amounts each year, and they come in addition to county and other local taxes and assessments.
What your contract must say
Contracts for the initial sale of a home inside a CDD must include a bold disclosure, in type larger than the rest of the contract, that the district may impose taxes or assessments on the property. Read it, then ask for the actual numbers.
Questions to ask before you sign
- What is the annual amount today, and how can it change?
- How long does it last, and can it be prepaid?
- How will it be billed to me?
- Which facilities and services does it pay for?
- Is it separate from the HOA dues, and what does each cover?
How to budget for it
Add the CDD amount to your estimate for HOA dues, insurance and property taxes, then compare the total monthly cost across communities, not just the sticker price. Two homes at the same price can cost very different amounts to own.
General information, not legal, tax or financial advice. Confirm details with your lender, attorney and tax advisor.