What is CDD? How does it affect me as a home buyer or owner in a community? CDD are initials standing for Community Development District. A CDD is a special purpose government entity that is set up to finance infrastructure and improvements in a community. The fees (“taxes” and/or assessments) that are collected by homeowners within that particular community are used to pay for improvements such as roads, schools and sewer & water systems.
Depending on the community, sometimes these fees can be allocated to amenities including swimming pools, tennis courts and parks. Note that some communities will have both a CDD fee and costs associated with a Homeowners Association (HOA) and these two entities serve different functions.
Typically, the CDD issues municipal bonds which allows a developer to finance the infrastructure costs noted above. Prior to the development of the land, a CDD fee payment is structured by the County Commissioners and the developer. Practically speaking, the CDD fee is a repayment of money loaned to the developer to pay for the roads, installation of the utilities and community amenities.
The CDD fee can be more than the repayment of the bond as there may be two parts: the Capital Bond Assessment (that’s the repayment portion of the loan) and the Operations & Maintenance Assessment (ongoing maintenance of amenities).
Although technically the CDD fee is not a tax, it shows up on your property tax bill as a “non ad-velorem” assessment. The tax collector is contracted to collect it for the Community Development Districts. The fee can change over time; examples are when a community votes to make an improvement or there are changes in the budget. You can pay off the capital assessment portion of the CDD fee but not the operating and maintenance portion. Generally, you won’t find a CDD in older communities.
Below you’ll find a list of some of the local communities in Collier County and Lee County which are within a Community Development District. Also, check CDD Florida for more information and data regarding particular neighborhoods.
- Fiddlers Creek
- Pelican Marsh
- Tuscany Reserve
- The Brooks
- Miromar Lakes
Pelican Bay is set up as a MSTBU (Municipal Services Taxing and Benefit Unit) which is governed by a board elected by resident property owners in Pelican Bay. All Pelican Bay property owners pay for the operation and maintenance of improvements through an annual assessment collected on the property tax bill. The Pelican Bay Services Division (PBSD) maintains the water management system, beautification of the medians and recreational facilities, maintenance of the preserve and conservation areas, the berm along Route 41, street signage and the landscaping at the community entrances along Tamiami Trail.
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