Nicole McGowanREALTOR®, MRP, SRS
Florida Terms, Explained Simply

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
CDDCommunity Development District

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.

What it pays forCDD vs. HOATry the calculator
The Short Answer

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.

2 PartsDebt service pays back the bonds that built the neighborhood. Operations and maintenance keeps it running.The debt part ends when the bonds are paid off. Upkeep doesn't.
20–30years is a typical bond length
Tax Billit's collected with your property taxes once a year
1,000+CDDs exist across Florida
Variesfrom a few hundred to a few thousand dollars a year

Sources: Florida Statutes, Chapter 190, FirstService Residential and Wikipedia.

Agent Tip From Nicole

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.

Try It

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.

Adds to your month today$150
After the bond is paid off$50in about 18 years
Debt left to pay over time$21,600

A rough estimate for comparing homes. Upkeep amounts can change each year, and your lender will use the exact figures.

Clearing It Up

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
Before You Buy

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
Q · EndingDo CDD fees ever go away?
The debt part ends once the bonds are paid off, often after 20 to 30 years. The upkeep part continues.
Q · Paying OffCan you pay off a CDD fee early?
Often the debt part can be paid off in one lump sum. Ask the district manager for the exact payoff and any terms.
Q · Going UpCan CDD fees go up?
The debt part is usually fixed. The upkeep part is set each year at a public meeting, so it can change.
More CDD QuestionsMortgages, disclosures and what happens if it's not paid
Q · MortgageIs a CDD fee included in my mortgage payment?
If you have an escrow account, it's usually paid along with your property taxes.
Q · DisclosureDoes the seller have to tell me about a CDD?
On a builder's first sale, Florida law requires a bold CDD notice in the contract.
Q · UnpaidWhat happens if a CDD fee isn't paid?
Like unpaid property taxes, it can lead to a tax certificate on the home.
Q · TaxesAre CDD fees tax deductible?
It depends on the property and the fee. A CPA can tell you for your situation.
Agent Tip From Nicole

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.

Finish Line Tracker

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.

Closer to the finish line
WhereTax collector siteLook forTwo CDD lines

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.

Closer to the finish line
WhoYou + your lenderToolThe calculator above

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.

Closer to the finish line
LawFlorida Statute 190.048WhoYou + your agent

The Title Check

The title company confirms what's owed on the CDD, much like it does with an HOA estoppel letter.

Closer to the finish line
WhoTitle companyWhenBefore closing

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.

Closer to the finish line
PaidWith your taxesNextYour keys
The Takeaway

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.

Insider Tip

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.

Looking at newer homes and don't have an agent yet? Text me.I'll help you find the CDD and HOA numbers before you fall for a house.

Serving Fort Walton Beach · Shalimar · Niceville · Navarre · Crestview