CDD Fees
What They Are and Why They Show Up on Your Florida Tax Bill
Crestview
- Fort Walton Beach
- Navarre
- Freeport
- Niceville
- Shalimar
- Mary Esther
- Destin
A small, special-purpose local government that pays for a neighborhood's roads, water, drainage and sometimes its amenities.
A CDD fee is the yearly assessment homeowners in that district pay back for it, and it's billed right on the property tax bill.
You find a newer home you love, the price fits, and then someone mentions "the CDD." It's one of the most misunderstood terms in Florida real estate, and it can change what you really pay each month. Here's what it is, how it works and what to ask before you buy.
A Neighborhood Loan, Paid Back Over Time
A developer uses a CDD to borrow money through bonds and build the neighborhood. Homeowners then pay it back through a yearly assessment, plus a smaller amount for upkeep.
Sources: Florida Statutes, Chapter 190, FirstService Residential and Wikipedia.
If you're touring newer neighborhoods around Crestview, Navarre or Freeport, ask early whether there's a CDD and how many years are left on the bond. A home with a lower price and a CDD can end up costing more each month than one without it, and that's an easy thing to miss.
The CDD Payment Translator
Enter the two CDD amounts from a tax bill and the years left on the bond. See what it adds to your month, now and after the bond is paid off.
A rough estimate for comparing homes. Upkeep amounts can change each year, and your lender will use the exact figures.
CDD vs. HOA, and How to Find It
Many Florida neighborhoods have both. They're not the same thing, and they're not paid the same way.
CDD
- A local government district, created under Florida law
- Pays for roads, water, drainage and sometimes amenities
- Billed once a year on your property tax bill
- Run by a board, with public meetings and budgets
HOA
- A private association, set up by the neighborhood's rules
- Enforces rules and cares for shared private spaces
- Usually paid monthly, quarterly or yearly to the HOA
- Can add a special assessment for big repairs
- Run by a board of homeowners, often with a management company
How do I find out if a house has a CDD fee?
Look at the home's property tax bill on the county tax collector's website. A CDD shows up as a "non-ad valorem assessment," listed below the regular property taxes.
- Check for two lines: debt service and maintenance
- Ask how many years are left on the bond
- Your title company can confirm what's owed before closing
More CDD QuestionsMortgages, disclosures and what happens if it's not paid
When you're comparing new construction in Crestview or Freeport with an older home in Fort Walton Beach or Niceville, compare the full monthly cost, not just the price. Add the CDD, the HOA and the insurance to the mortgage, and the "cheaper" house isn't always the cheaper house.
Follow the CDD to the Finish Line
Tap each stage to see where the CDD comes up from your first look to closing day.
Spot the CDD
Check the listing details and the property tax bill. A CDD shows up as a non-ad valorem assessment.
Run the Real Numbers
Ask for the debt and upkeep amounts and the years left on the bond, then add them to your monthly budget with your lender.
The Contract
On a builder's first sale, Florida requires a bold CDD notice right above where you sign. On a resale, ask your agent to confirm the CDD details before you go under contract.
The Title Check
The title company confirms what's owed on the CDD, much like it does with an HOA estoppel letter.
Closing Day
The CDD is usually handled along with the property taxes at closing, and from then on it's part of your yearly tax bill.
Know the Number Before You Fall in Love
A CDD isn't a bad thing. It's often how a newer neighborhood got its roads, drainage and amenities. But it's a real part of what you'll pay each year, so find it on the tax bill, ask how many years are left on the bond, and build it into your budget before you make an offer.
When the bond on a neighborhood is close to being paid off, that home's yearly CDD cost is about to drop. It's worth asking about when you're comparing two similar homes.
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