Kissimmee Community Development District (CDD) Guide
If you're looking to buy a home in Kissimmee, Florida it's essential to understand the role of Community Development Districts (CDDs) in home taxes. CDDs are created by the state to serve the long-term needs of specific communities, and they are responsible for financing, constructing, and maintaining community infrastructure and services. This guide will explain how CDDs work and how they impact your property taxes.
What is Community Development District (CDD)?
If you live in a Community Development District (CDD), you help finance, construct, and operate infrastructure and services within the district. CDDs are created by state statute as independent political subdivisions of the state, which means they have the power to issue bonds, levy taxes, and assessments to pay for the infrastructure and services they provide. If you live in a CDD-governed community, you pay the CDD and your taxes; these fees go toward maintaining and improving the district for everyone living there.
Before buying a home in a CDD, be sure to research the fees associated with living there so you can factor them into your budget. This is an important step in the home-buying process, as you want to be prepared for all ownership costs.
CDD fees can vary depending on the services and amenities provided in the district, so it's important to ask questions and get all the information you need before making a purchase. With a little research, you can find the perfect CDD-governed community in Kissimmee for you and your family.
What does it cover?
CDDs typically finance and construct infrastructures such as roads, water, sewer systems, stormwater drainage, parks, and recreation facilities. They may also provide other services such as public safety, street lighting, and Solid Waste Management.
The Pros & Cons of Living in a CDD
Community Development Districts offer residents many benefits, including well-maintained infrastructure and amenities, enhanced property values, and a higher quality of life.
However, CDDs also have some drawbacks. One of the biggest is that CDD fees can significantly add to a district's cost of living.
How do CDDs Impact My Property Taxes?
CDDs are funded through various mechanisms, including bonds, assessments, and taxes. Living in a CDD-governed community will likely see all three of these fees on your property tax bill.
CDD bonds are paid off over time through ad valorem taxes. The amount you pay each year will depend on the value of your property and the outstanding balance of the bonds.
Assessments are fees charged by the CDD for ongoing operations and maintenance costs. These fees are typically collected along with taxes.
CDD taxes are levied by the district to generate revenue for its operations. The amount of tax you pay will depend on the value of your property and the millage rate set by the CDD.
CDD vs. HOA: What's the Difference?
Understanding the difference between Community Development Districts and Homeowners' Associations (HOAs) is important. Both are common in Florida, and they both impact your home taxes.
The key difference is that CDDs are created by state statute, while HOAs are private entities created by developers. As such, CDDs have the power to issue bonds and levy taxes, while HOAs do not.
Another difference is that Community Development Districts are required to provide certain services to residents, while HOAs are not. This means you may have to pay for services even if you don't use them.
Finally, CDDs typically cover a larger area than HOAs. For example, a CDD might encompass an entire community, while an HOA might only cover a single neighborhood.
The bottom line is that Community Development Districts can significantly impact your property taxes. These fees can add considerably to the cost of living, so it's important to understand how they work before you buy a home in one.
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