CDD Fees vs HOA Fees
A CDD fee is a Community Development District fee, which is a type of special assessment used in the United States to finance the construction and maintenance of infrastructure improvements in newly developed areas.
The purpose of a CDD fee is to provide funding for public works projects and other amenities that would not be possible without the assistance of special assessments. Common examples of CDD-funded amenities include parks, playgrounds, trails, and public transportation.
CDD fees are generally collected by local governments from the developers of new residential and commercial developments. In some cases, the fees may be assessed on a per-unit basis, while in others, they may be based on a percentage of the total project cost.
In many cases, CDD fees are used to finance the construction of infrastructure improvements that benefit the entire community, such as new roads or water and sewer lines. In other cases, they may be used to fund specific amenities within a development, such as a swimming pool or clubhouse.
CDD fees differ from homeowner association (HOA) dues in a number of ways. First, CDD fees are assessed by local governments, while HOA dues are collected by the homeowners association itself. Second, CDD fees are generally based on the size or cost of the development, while HOA dues are typically a fixed monthly or annual amount regardless of the size of the development.
Third, CDD fees are used to finance specific public works projects or amenities, while HOA dues are typically used for general maintenance and operation of the development. Finally, CDD fees are generally not tax-deductible, while HOA dues may be deductible in some cases.
Whether you’re a developer planning a new residential community or a homebuyer considering a purchase in a newly developed area, it’s important to be aware of the potential for CDD fees. By understanding how these fees work and what they’re used for, you can make sure that you’re prepared for the potential cost of living in a new development.
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