Quote:
Originally Posted by retiredguy123
Yes. The bond is based on the total cost for the infrastructure for a particular area of construction. Every house of the same type (designer, villa, etc.) constructed within that area will be assessed the same bond amount regardless of the size or price of the house. So, a $500K designer house will have the same bond amount as a $350K designer house. The bond interest is not tax deductible because it is not based on the value of the house. The IRS only allows tax deductions for mortgage loans that are based on the value of the house. And, obviously, by not including the infrastructure cost in the price of the house makes it easier to sell the houses, and easier to get mortgages.
|
There are two items on your tax bill commonly called "bond." One is the maintenance bond, assessed annually by your CDD, which pays for upkeep of the common areas. This part is not tax deductible. The other is the capital bond, which paid for the streets, sewers, lighting, etc, early in the development process. As pointed out above, this cost could have been rolled into the price of the house, so interest on this debt is properly considered interest on a portion of the cost of the house, which is tax deductible assuming you itemize. You can go to the VCCDD web site and look up the amount of the capital bond, the yearly amount allocated to interest and to capital payoff, and the interest rate, to decide whether it makes sense to pay off the bond early.