Shopping homes in Holiday and seeing “CDD” on the listing or tax bill? You are not alone. Community Development District fees can change your monthly budget more than you think, and it is smart to understand them before you make an offer. In this guide, you will learn what a CDD is, how the fees appear on Pasco County tax bills, and a simple way to compare homes apples to apples. Let’s dive in.
What is a CDD in Florida?
A Community Development District is a special local government created under Florida Statutes, Chapter 190 to plan, finance, build, and maintain community infrastructure. Think roads, water and sewer systems, stormwater, landscaping, lighting, and amenity centers. The CDD funds these improvements and services for the neighborhood it serves.
Why developers use CDDs
Developers use CDDs to finance big up-front costs through tax-exempt municipal bonds instead of rolling everything into the initial sale price. This approach can deliver more complete infrastructure and amenities earlier in the life of a community.
Who runs the district
A CDD is governed by a public board of supervisors. Early on, the developer usually controls the board because votes are tied to land ownership. As homes sell, residents typically elect the board. Since CDDs are public entities, they have powers private HOAs do not, including issuing bonds and levying special assessments.
How CDD fees show on Pasco tax bills
CDD assessments are non-ad valorem special assessments. In Pasco County, they normally appear on your annual property tax bill in a section labeled for non-ad valorem assessments, with one or more lines showing the district name and the amount.
Debt service vs. O&M
Most CDD bills include two parts:
- Debt service: repayment of bonds used to build roads, utilities, stormwater systems, and amenities. These payments continue until the bonds are paid off.
- O&M (operations and maintenance): annual costs to run and maintain community assets, landscaping, common-area utilities, administration, and amenities.
When bonds are outstanding, the tax bill may show separate lines for debt service and O&M. O&M continues each year and can change with the adopted budget.
When and how you pay
Pasco bills CDD assessments annually with property taxes. Some lenders escrow these assessments monthly with your mortgage payment. Others may allow you to pay them at tax time. Confirm your lender’s policy so your monthly budget is accurate.
What CDD fees mean for your budget
CDD fees are part of your total housing cost. To compare two homes fairly, add CDD to all your other recurring costs.
A simple monthly cost formula
Monthly ownership cost ≈ mortgage principal and interest + (annual property taxes + annual CDD + annual HOA) ÷ 12 + insurance and any escrowed items.
Quick examples with round numbers
- Lower CDD example: $900 debt service + $300 O&M = $1,200 per year, about $100 per month.
- Higher CDD example: $2,400 debt service + $1,200 O&M = $3,600 per year, about $300 per month.
If two similar homes have the same mortgage payment, the second home in this example could cost about $200 more per month because of the higher CDD. That difference adds up over time.
CDD vs. HOA: key differences
- CDD: Public entity that issues bonds and levies non-ad valorem assessments, most often collected on the property tax bill. Funds bond payments and district O&M for infrastructure and amenities owned by the district.
- HOA: Private association that enforces covenants and collects dues directly. Funds services like common-area maintenance, reserves, covenant enforcement, and some amenities.
Many Holiday communities have both a CDD and an HOA. Always include both when you budget.
Holiday buyer checklist: verify your numbers
You can confirm what you will owe before you make an offer.
Documents to request
- Current year Pasco County property tax bill for the specific parcel, showing CDD line items.
- Seller’s CDD disclosure and any closing statement notes on prepayments or prorations.
- District’s most recent adopted budget and meeting minutes for O&M details and upcoming projects.
- District debt schedule or bond official statement with maturity dates and payment schedules.
- HOA declarations and bylaws to confirm dues and special assessment rules.
- Title commitment and payoff information to verify no unpaid assessments or liens.
Steps to take in Pasco County
- Pull the property’s tax bill through the Pasco County Property Appraiser or Tax Collector records to see actual current CDD charges.
- Contact the district clerk or manager to request the latest budget, debt schedule, and any prepayment policies.
- Ask the listing agent or seller if any CDD assessments have been prepaid and whether any special assessments or capital projects are planned.
- Confirm with your lender whether CDD assessments will be escrowed and how they will be counted in underwriting.
Red flags to watch in Holiday CDDs
- O&M assessments that have risen quickly in recent budgets, which may signal higher operating costs or low reserves.
- Large upcoming capital projects or potential bond refundings that could change assessments.
- Multiple CDD line items for the same property on the tax bill, which can increase your total payment.
- Incomplete or missing CDD disclosure in the seller’s paperwork.
Lender and resale considerations
Lenders include ongoing assessments like CDD and HOA when they calculate your monthly obligations and debt-to-income ratios. Unpaid CDD assessments become a lien and can delay or block closing if not resolved. Some buyers prefer homes with lower recurring assessments, so the size of your CDD can influence future marketability.
Bottom line for Holiday buyers
CDD fees are not good or bad on their own. They are a tool that funds roads, stormwater, utilities, and amenities in many Pasco communities. What matters is knowing the exact numbers for the home you want, how those numbers fit your budget, and how they may change over time with O&M budgets and bond schedules.
If you want help pulling the right records and comparing homes by true monthly cost, reach out to Rick Bishop. You will get clear steps, quick answers, and local guidance tailored to Holiday and greater Pasco County.
FAQs
What is a CDD and how does it affect my Holiday home purchase?
- A CDD is a public district that finances and maintains neighborhood infrastructure, and its assessments appear on your tax bill, which affects your monthly housing cost.
Where do I find CDD fees on a Pasco County tax bill?
- Look in the non-ad valorem assessments section for the district name and amounts, often with separate lines for debt service and O&M.
Can CDD fees go away after bonds are paid?
- Debt service assessments can end when bonds mature or are prepaid, but O&M assessments typically continue to fund ongoing maintenance and administration.
How are CDD fees different from HOA dues?
- CDD assessments are public, tax-bill charges for bond payments and district O&M, while HOA dues are private fees for association services, reserves, and covenant enforcement.
Will my lender escrow CDD assessments?
- Many lenders escrow these along with taxes, but policies vary, so confirm with your lender to understand your monthly payment.
What should I ask the seller about CDDs on a Holiday home?
- Ask whether any CDD assessments were prepaid, if special assessments are planned, and request the latest district budget and debt schedule to verify amounts.
