Community Development Districts in Southwest Florida-What you need to know

Community Development District, or CDD, refers to a community that assesses fees to pay for infrastructure within the community. CDD fees are different from HOA fees in that they are incorporated into your annual property tax bill under the non ad valorem section.

Community Development Districts are very common with large production builders of Master planned communities in Southwest Florida and the buyers of real estate in CDD communities should certainly beware and understand the cost to own a home in a CDD community.

2 reasons why large master planned communities have a CDD:

1. The community consists of very expensive infrastructure and the developer would rather the homeowners pay the bond off over time then the developer deploying the capital to build it out themselves.

2. A CDD actually makes the homes cheaper to purchase since the infrastructure is not loaded into the home prices and more buyers are attracted to the lower home prices.

In essence, the homeowners of brand new home communities will pay off the infrastructure bond or CDD over the period of 25 to 30 years.

Buyers in a established CDD community will assume the remaining balance of the CDD if there is a balance remaining.

The larger the lot, the more the CDD will be. For Example, if a CDD community has 3 series of homes to choose from, the home series with the larger lots will have a larger annual CDD payment on your tax bill and a larger CDD balance. A CDD can add thousands of dollars to your annual property tax bill.

Some communities may have an annual O&M assessment.

Home buyers in Southwest Florida should also beware of costs associated with operations and maintenance assessments(O&M assessments) which are also found under the non ad valorem section of your annual tax bill. The O&M assessment is on going.

O&M Assessments are based on the District's Operations and Maintenance Budget, which is adopted annually.

For Information on Southwest Florida real estate, please Contact Southwest Coast Realty.

Ken O'Brian
Licensed Real Estate Broker/Owner
Southwest Coast Realty, Inc.
4100 Corporate Square 171
Naples, FL 34104
239-229-9926

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