What is a CDD Fee?

St Augustine Team Realty

CDD = Community Development District. This fee is best described as a loan for the developer to finance amenities to a community by using a tax-free municipal bond. The bond helps to pay for roads, utilities, golf courses, clubhouses, pools and other niceties a community will have to offer.

The CDD fee is a yearly fee and usually structured on a 10 to 30 year term, once the term of the bond is over the fee no longer exists. The bond is essentially a loan to the developer and the bond is payment on the loan. Your realtor can answer any questions you have about a particular CDD fee.

Every homeowner in a community with a CDD fee will pay on a yearly basis. The fees vary across the state, here in Saint Augustine Florida an average CDD fee is $2000 per year. The CDD fee is in addition to your taxes, insurance and if applicable a home-owner’s association expense. The CDD fee will be included in your yearly tax bill.

Note: The taxes that a current home owner is paying will most likely change after the property is sold.

So ask questions when looking at property, find out what your monthly cost would be to own the home you’re considering. An informed buyer will always have the upper hand in negotiating a fair price for real estate.

Don’t be put off by CDD fees when searching for a home, usually these homes are priced lower than comparable homes in the areas without CDD fees. Let’s say the CDD fee is two thousand dollars a year, that breaks down to $167 per month and over 30 years the total cost to a homeowner would be $60,120.

Remember working with a Realtor® is the best way to stay informed with anything real estate related, and not every real estate agent is a Realtor®.



One response to “What is a CDD Fee?

  1. Thank you for keeping us to date, especially with hidden costs and who pays for them.
    Never heard of CDD fees.

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