Community development district

What it means

A district is a unit of special-purpose local government, not a private association. It issues bonds to build roads, water and drainage, and repays them through an assessment collected on the property tax bill.

A community can have both a district and an association, charging separately for different things.

Why it matters

It is a real and often substantial cost that does not appear in the sale price, and buyers who compared two homes on price alone have been surprised by it.

Because it arrives on the tax bill it can look like a tax, and unlike a tax it may have a payoff figure.

When you are likely to meet it

• In large planned communities, especially in Florida.
• On a property tax bill with a line nobody can explain.
• When working out the true carrying cost of an inherited home.

How this varies by state

Districts exist under state enabling law and are far more common in some states than others.

Related terms

• Age-restricted communityA neighborhood that may lawfully require residents to be over a certain age, usually 55 or 62.
• Assessed valueWhat a taxing authority says a property is worth, which is rarely what it would sell for.
• Homeowners associationThe body that enforces a neighborhood's rules and collects its dues, with real power over the property.
• Real propertyLand and what is permanently attached to it — a house, a barn, a fixed structure. Everything else a person owns is personal property.
• Vacant and unoccupiedTwo words an insurer uses differently, and the difference can void the cover on an empty house after a death.

Sahvelo guidance that uses this

• Housing transitions