bond/assessment?

[April23]

Hello! First post for me as I begin to investigate TV. What is a bond? What is an assessment? Does every house have one? I see homes for sale that say "bond is paid" but will it come back ever? Thanks for your insightful information.

[retiredguy123]

Basically, the bond is a one-time payment to construct the infrastructure (roads, utilities, etc), for the community. The money is borrowed and each homeowner pays his/her share over 30 years, but it can be paid off early. Assessments are annual payments to maintain the infrastructure, including the fire department. Assessments never end.

[villagetinker]

Hello! First post for me as I begin to investigate TV. What is a bond? What is an assessment? Does every house have one? I see homes for sale that say "bond is paid" but will it come back ever? Thanks for your insightful information.

As noted above, the bond is used to cover the initial cost of the infrastructure associated with the house. In general, every house has one INITIALLY, but you may find some resales with the bond paid off, and no it does not come back. Also as noted above the maintenance assessment is for the continuing maintenance of the infrastructure and possible new additions as determined by the local CDD.
ALL new homes will have bonds. We chose to pay ours off as it CANNOT be deducted from IRS taxes and the interest rate was high enough to be annoying.
Now to make your life more confusing some locations have two (2) taxes, county and city, this occurs mostly in the newer sections south of route 44, city locations would include Wildwood, Leesburg, Fruitland Park, and possibly others.

[April23]

Do assessments fluctuate? Some years higher some years lower? Are they tax deductible?

[retiredguy123]

Do assessments fluctuate? Some years higher some years lower? Are they tax deductible?
Yes, they fluctuate. No, they are not tax deductible, unless the house is rental property.

[Altavia]

Here's a nice video from GoldWingnut that explains bonds.

https://youtu.be/nGwf7AcmyEI?si=CDck30iVzJgtU3Ho

https://www.talkofthevillages.com/forums/investment-talk-158/bond-payments-developers-point-view-345804/#post2279270

Amenity Fee
https://youtu.be/RDjafwcRtQg?si=Jda6HCsebWEt2kyS

[retiredguy123]

Note that the bond payments and the assessments are billed by the county on your annual tax bill. But, these are not property taxes and the money does not go to the county. They only appear on the tax bill as a convenient collection method.

[CarlR33]

You should start with a Villages Realtor and do a lifestyle visit, The realtor will explain all in great detail while showing your around..

[Bill14564]

There are three bonds/assessments/fees you need to think about:

1. The Bond which, as described, is your portion of the roads and infrastructure for your area. A previous owner may have paid this off.

2. The annual maintenance fee. This pays for ongoing maintenance of the infrastructure. This may be increased occasionally.

3. The monthly amenity fee. This pays for staffing of the Poole, rec centers, gates, and community watch. This is paid monthly on your utility bill.


None of these are tax deductible.

[Altavia]

You should start with a Villages Realtor and do a lifestyle visit, The realtor will explain all in great detail while showing your around..

Village Reps arrange Lifestyle visits.

Do not depend on Reps or a Realtor for reliable information, do your research.

[Rainger99]

Hello! First post for me as I begin to investigate TV. What is a bond? What is an assessment? Does every house have one? I see homes for sale that say "bond is paid" but will it come back ever? Thanks for your insightful information.

From districtgov.org

What is a bond?
The infrastructure of the District in which you live was built with tax-exempt bonds. The bonds are repaid with monies collected in the annual tax bill sent out by the County Tax Collector’s Offices and appear in the Non-Ad Valorem section of the tax bill as “Bond Debt Assessment.”

You may pay off your bond assessment in full at any time; however, you are not required to pay off this assessment in advance.

To find out the exact payoff figure or for any additional questions, please contact the Bond Team at 352-751-3900.

[SIRE1]

The best description I ever heard of a bond, is this. In traditional subdivisions the builder has to put in roads, sewers, water, etc before they start building any houses. As the houses are built, the builder prices the house to cover all of their expenses (the roads, sewers, water, building materials, labor, etc) PLUS their profit. The total is then the list price of the house.

In The Villages, the developer chose to separate those expenses and sold bonds to raise the money for the initial infrastructure (e.g. roads, sewers, water, etc). These costs were divided by the number of homes being built and that is the bond. The cost of actually building the actual house plus profit is the asking price for a new home.

So, in effect, the asking price for a new home in The Villages would be less than found elsewhere, since those homes would already include the infrastructure cost included. Sneaky, but that is the way the developer chose to run their operation. So in addition to asking price of a home, you ALSO have the pro-rated bond amount to pay for. You can either include the bond payment in your monthly bill, or pay it all at once and never have to worry about it again. But don't think you will recover the bond cost when you sell your home. Your asking price is usually being based to compare with a new home asking price which doesn't include the bond.

[Goldwingnut]

Here's the link to the entire list of videos I did on the Bond, Maintenance Assessments, and Amenity Fee. While some of the number shown have changed the information is still valid. With the announce purchase of amenities in CDD 12 & 13 it is becoming obvious to me that it may be time to review and renew these videos in the coming year, the information hasn't changed dramatically but the numbers need to be adjusted and most certainly the underlying video footage has changed tremendously since the original videos were made over 5 years ago.

The Villages Information/Fees Videos - YouTube (https://youtube.com/playlist?list=PLhsy5KtCo4HAND0Dbf0JXOwQl_Py42dSX&si=8uaVVJrfPlxJdCqv)

[Ash Marwah]

You pay for infrastructure like roads, sewer etc. as Bond payment and Bond Maintenance payments. Initial Bond on houses in TV range from $25,000 to $50,000 on top of the price of the house. Bond Maintenance in hundreds of dollars continues for the life of the house.

[sharonl7340]

You pay for infrastructure like roads, sewer etc. as Bond payment and Bond Maintenance payments. Initial Bond on houses in TV range from $25,000 to $50,000 on top of the price of the house. Bond Maintenance in hundreds of dollars continues for the life of the house.


We bought a pre-owned home and our bond on a 6 year old house when we bought was $10,000. We are only about 2-3 miles from Brownwood, between CR466A and SR 44. Our assessment went up this year because our fire department service went up 100%.

If you buy in the new area, your bond is closer to $50k than $25k. Our maintenance was $276, bond was $672, fire district fee was $321. All of those are in your yearly tax bill.

Now you have an idea of those costs as well. BTW, we have a patio villa. So if you get a bigger house those assessments would increase.

[Altavia]

Here's the link to the entire list of videos I did on the Bond, Maintenance Assessments, and Amenity Fee. While some of the number shown have changed the information is still valid. With the announce purchase of amenities in CDD 12 & 13 it is becoming obvious to me that it may be time to review and renew these videos in the coming year, the information hasn't changed dramatically but the numbers need to be adjusted and most certainly the underlying video footage has changed tremendously since the original videos were made over 5 years ago.

The Villages Information/Fees Videos - YouTube (https://youtube.com/playlist?list=PLhsy5KtCo4HAND0Dbf0JXOwQl_Py42dSX&si=8uaVVJrfPlxJdCqv)

Thanks for grouping this information Don, also interesting looking back.

[Papa_lecki]

So, in effect, the asking price for a new home in The Villages would be less than found elsewhere, since those homes would already include the infrastructure cost included. Sneaky, but that is the way the developer chose to run their operation.

Is it sneaky? It seems very transparent.

[dsattazahn]

I would definitely go with a lifestyle visit as they would explain most of everything you need to know in the Villages. They will try to sell you a new house but they can also show you preowned properties. I would not stick with a realtor from the villages as they are not licensed realtors. I would go with a licensed realtor and you can also go with a Villages Realtor and look at both type properties.

[Altavia]

Is it sneaky? It seems very transparent.

Exactly, primary advantage is bonds allow the infrastructure to be in place simultaneously with home construction.

Bonds carry with the property and are not a personal debt. They do not affect your credit. They are an annual expense unless paid off.

Bonds effectively reduce the amount of a loan if financing the house when compared to including the bond value in the cost of the home.

The true cost of a Bond is the difference between what that money could earn if invested and the Bond interest.

A simplified example - if the bond is 5% and you can earn 4% in a CD, true cost is 1%.

But many people are not comfortable with debt of any kind and have the resources to pay it off.

[Goldwingnut]

We bought a pre-owned home and our bond on a 6 year old house when we bought was $10,000. We are only about 2-3 miles from Brownwood, between CR466A and SR 44. Our assessment went up this year because our fire department service went up 100%.

If you buy in the new area, your bond is closer to $50k than $25k. Our maintenance was $276, bond was $672, fire district fee was $321. All of those are in your yearly tax bill.

Now you have an idea of those costs as well. BTW, we have a patio villa. So if you get a bigger house those assessments would increase.

Your maintenance assessment was not affected by the Fire Assessment, but they are both listed on the non-ad valorem portion of your property tax bill but are completely unrelated.
You're correct that the bond is now higher in the newer section, where you are was built 10-11 years ago when prices and costs were much lower. My CYV bond was $13K, but that was based on a bond issued in 2012. My second home in Moultrie Creek has a bond that is 4x the CYV ($52K), a difficult pill to swallow but it is a full decade later and costs have been crazy.

Bonds will continue to increase with each new one issued, just as they have for the last 3 decades. Bonds are the highest they have ever been in the new sections, funny thing is is that's it's always been that way. In 2034 when people are paying bonds of $40K on a patio villa and $80K on a designer home and buyers saying that bonds are the highest they have ever been, the buyers will look at what we are paying today with longing.

[LonnyP]

One of the interesting things is here in the Villages the bond does not appear to add value to the place that you may be looking at. Meaning that if two identical places side by side, they are likely priced the same regardless if one for example has a bond, and the other the bond is paid off. The realtors likely price them the same. Doesn't make sense to me. But, you as a buyer can do your due diligence and look for the house you like and try to find one without a bond or a lower bond perhaps and get your own value out of that.

[April23]

We bought a pre-owned home and our bond on a 6 year old house when we bought was $10,000. We are only about 2-3 miles from Brownwood, between CR466A and SR 44. Our assessment went up this year because our fire department service went up 100%.

If you buy in the new area, your bond is closer to $50k than $25k. Our maintenance was $276, bond was $672, fire district fee was $321. All of those are in your yearly tax bill.

Now you have an idea of those costs as well. BTW, we have a patio villa. So if you get a bigger house those assessments would increase.

Those are monthly fees - right?

[JWinATL]

Basically, the bond is a one-time payment to construct the infrastructure (roads, utilities, etc), for the community. The money is borrowed and each homeowner pays his/her share over 30 years, but it can be paid off early. Assessments are annual payments to maintain the infrastructure, including the fire department. Assessments never end.

That is one of the most succinct and thorough explanation I have ever seen! Bravo!!!

[RustyN]

Bond tax video

The Villages, Bonds, Taxes, Maintenance Fees and the CDD. What are they and why do we pay them?
https://youtu.be/A120kMpc2ug

[Bwanajim]

I bought two years ago and my bond was 36K. I’m paying 3.1% interest rate. Why would I pay it off if I’m earning 5% in my investments? And I’ll be dead long before it’s paid off anyway. Let my heirs pay for it. Lol

[Bill14564]

I bought two years ago and my bond was 36K. I’m paying 3.1% interest rate. Why would I pay it off if I’m earning 5% in my investments? And I’ll be dead long before it’s paid off anyway. Let my heirs pay for it. Lol

This year. When I paid mine off the markets were not so healthy (and this has not been a good week).

[dewilson58]

I bought two years ago and my bond was 36K. I’m paying 3.1% interest rate. Why would I pay it off if I’m earning 5% in my investments? And I’ll be dead long before it’s paid off anyway. Let my heirs pay for it. Lol

With the Admin Fee..................You are probably over 5%.
Your investments are probably taxable...................you are probably under water.

[BrianL99]

The unfortunate side of the Bond process (CDD's), is that Consumers and Brokers are allowed to advertise misleading Home prices. I suppose the reason the FL legislature hasn't stepped in to regulate, is that it's good for business and Florida is a business friendly state.

The fact of the matter is, it's unfair to consumers. I bet there's not 10% of Villagers, who clearly understand the entire process and how it all works. It's perfectly clear that Buyer's don't understand it, or pre-owned home prices would be more sensitive to the remaining (or paid off) bond balance.

It's real money. It's not pretend money. It's sort of like renting the land your house is on for 20 years and after you finish paying your 20 years of "rent", you own the land.

The whole process is misleading and unfair to consumers, but surely legal and almost all CDD communities do it the same way.

[Bjeanj]

Before you buy, ask for the deed restrictions for the district. Most of them are pretty much the same between districts, but there may be some differences. Understand what each of the restrictions mean.

[manaboutown]

I bought two years ago and my bond was 36K. I’m paying 3.1% interest rate. Why would I pay it off if I’m earning 5% in my investments? And I’ll be dead long before it’s paid off anyway. Let my heirs pay for it. Lol

Since the interest on the bond is not tax deductible (unless the house is a rental and it is expensed) if your 5% investment income is taxable you are about breaking even, making <1%.

[Bogie Shooter]

Before you buy, ask for the deed restrictions for the district. Most of them are pretty much the same between districts, but there may be some differences. Understand what each of the restrictions mean.

No need to ask they are all on line at Home Page - The Villages Community Development Districts (http://www.districtgov.org).

[Altavia]

Since the interest on the bond is not tax deductible (unless the house is a rental and it is expensed) if your 5% investment income is taxable you are about breaking even, making <1%.

How would you factor in the risk of not recovering the bond cost when selling the home?

[manaboutown]

How would you factor in the risk of not recovering the bond cost when selling the home?

Well, that is another matter. I believe post #12 covered it pretty well. If one chooses to pay off the bond early one is extremely unlikely to recover that amount on sale over a comparable house selling with bond still in place. The buying public for the most part doesn't know or care about the bond. When I was steered to new spec homes by my first TV agent he did not mention diddly squat about a bond and evaded discussing the matter when I asked him how much the bond would be on the house he was showing me. He never came up with a number! Based on my experience TV agents treat most buyers like mushrooms regarding the bond, keep them in the dark and feed them organic fertilizer.

[Goldwingnut]

Well, that is another matter. I believe post #12 covered it pretty well. If one chooses to pay off the bond early one is extremely unlikely to recover that amount on sale over a comparable house selling with bond still in place. The buying public for the most part doesn't know or care about the bond. When I was steered to new spec homes by my first TV agent he did not mention diddly squat about a bond and evaded discussing the matter when I asked him how much the bond would be on the house he was showing me. He never came up with a number! Based on my experience TV agents treat most buyers like mushrooms regarding the bond, keep them in the dark and feed them organic fertilizer.

Me personally, if the sales agent either can't immediately answer the question about the bond amount or is unwilling to take out their cell phone and make a call to their office to find out the amount of the bond right there on the spot (yes if they want to they can find it that quickly), I'd be ending the conversation with "YOU'RE FIRED".

The bond is a significant and integral part of buying a home here in The Villages and can represent an addition 5 to 10% of the cost of a new home's price on top of the cost of the home itself, they know these facts and if they're trying to avoid the issue it's time to find a new sales rep.

As was stated previously, the bond amounts are already available on the districtgov.org website and have been public information since early in the building process for homes in that phase of the CDD. Preliminary bond amounts for CDD15 phase 2 (Oak Hollow, Edenfield, LaGrange, Lake View) have already been published for over a month.

Remember, it's YOUR MONEY that you're spending, you have the right to know how much things are going to cost. While some numbers like utilities costs are rough estimates, the bond and prevailing rate for the Amenity Fee are known fixed costs. With hundreds of Villages sales reps available it's easy to find a new rep. Ensure YOUR MONEY is your primary concern not THEIR FEELINGS. They exist to sell you a product, if you go elsewhere because you're not getting the information you need to protect YOUR MONEY then hurting their feelings isn't your concern, it's their own fault. You have YOUR MONEY because of what you did, they will have HURT FEELINGS because of WHAT THEY DIDN"T DO.

[Bilyclub]

I would definitely go with a lifestyle visit as they would explain most of everything you need to know in the Villages. They will try to sell you a new house but they can also show you preowned properties. I would not stick with a realtor from the villages as they are not licensed realtors. I would go with a licensed realtor and you can also go with a Villages Realtor and look at both type properties.


The Villages sales people are licensed real estate agents by the State of Florida, just like MLS agents. Realtor’s are members of a private association that owns the realtor name.

[SIRE1]

And as others have pointed out, the bond amount varies between areas in The Villages. The reason is, of course, WHEN those areas were built. We all know, prices for materials and labor have risen significantly in the last 20 years. Since the bond amount is determined by how much it cost the developer to put in the infrastructure, those new areas that are built today will cost much more than those that were built 5 years, 10 years, and 20 years ago. So the bond for a resale north of 44 is going to be less than those newer homes south of 44. And I suspect, the bond will be more for those new homes to be built south of the turnpike than those north of the turnpike.

[retiredguy123]

I would definitely go with a lifestyle visit as they would explain most of everything you need to know in the Villages. They will try to sell you a new house but they can also show you preowned properties. I would not stick with a realtor from the villages as they are not licensed realtors. I would go with a licensed realtor and you can also go with a Villages Realtor and look at both type properties.
There is no such thing as a licensed realtor. Anyone who sells real estate in Florida for a commission must have a state license. But, they do not need to be a Realtor.

[bilcon]

You should start with a Villages Realtor and do a lifestyle visit, The realtor will explain all in great detail while showing your around..

It is nice to know that the "Villages Realtor" will explain it to you. When I bought 15 years ago, the Bond topic was never discussed. Luckily, I spoke to a lot of residents before I bought and they informed me about the bond. (Impact Fees). We are one of the few developments that charges the homeowner a bond, but I'm not complaining because the infrastructure was well planned.

[manaboutown]

It is nice to know that the "Villages Realtor" will explain it to you. When I bought 15 years ago, the Bond topic was never discussed. Luckily, I spoke to a lot of residents before I bought and they informed me about the bond. (Impact Fees). We are one of the few developments that charges the homeowner a bond, but I'm not complaining because the infrastructure was well planned.

My experience with the Villages agent evading even revealing the existence of much less discussing the bond occurred 15 years ago when I first visited TV on a lifestyle visit. Hopefully things are different now. I had known about the bonds from posts on TOTV. Since the agent had not mentioned them I had to ask him about them. He hemmed and hawed and only begrudgingly admitted they even existed if memory serves me right. I did move on to another TV agent who was more forthcoming.

[BrianL99]

It is nice to know that the "Villages Realtor" will explain it to you. When I bought 15 years ago, the Bond topic was never discussed. Luckily, I spoke to a lot of residents before I bought and they informed me about the bond. (Impact Fees). We are one of the few developments that charges the homeowner a bond, but I'm not complaining because the infrastructure was well planned.

The Bond and Impact fees, are separate and distinct. The "Bond" is not, in any way, related to Impact Fees.

Nor is The Villages "one of the few developments that charges the Homeowner a bond". Almost all large residential developments in Florida have been developed using the CDD model (& bonds), for over 40 years. There are 1635 "Special Districts" in Florida, of which 575 of them are CDD's.

[Bill14564]

The Bond and Impact fees, are separate and distinct. The "Bond" is not, in any way, related to Impact Fees.

Nor is The Villages "one of the few developments that charges the Homeowner a bond". Almost all large residential developments in Florida have been developed using the CDD model (& bonds), for over 40 years. There are 1635 "Special Districts" in Florida, of which 575 of them are CDD's.

CDD != Bond


I don’t believe there would be a bond without a CDD but a CDD does not require a bond.

[pcntech]

Go to thevha.net, hover on The Voice, scroll down to VHA news and notes, click on Special Presentation and toward bottom click on Special Presentation, Where Does Your Money Go? Will cover all this stuff.

[Goldwingnut]

CDD != Bond


I don’t believe there would be a bond without a CDD but a CDD does not require a bond.

Bonds can be justified and issued by most any government body in the state, a CDD is one of those types of bodies.
Bonds can be issued for any number of reasons, the bonds most spoken of here in TV are development bonds for the cost of building the infrastructure but there are others in use here. VCCDD is issuing bonds for the purchase fire stations and SLCDD will be issuing additional bonds for the purchase of amenities, Sumter County issued bonds for the construction of the new county service center and fire training center.

[manaboutown]

Bonds can be justified and issued by most any government body in the state, a CDD is one of those types of bodies.
Bonds can be issued for any number of reasons, the bonds most spoken of here in TV are development bonds for the cost of building the infrastructure but there are others in use here. VCCDD is issuing bonds for the purchase fire stations and SLCDD will be issuing additional bonds for the purchase of amenities, Sumter County issued bonds for the construction of the new county service center and fire training center.

Are these CDD bonds tax exempt municipals?

[jrref]

If you were in the market to buy a home and you had a choice of basically two identical homes priced the same. One with the bond paid and one not. Would you choose the home that has the added yearly expense of $1,500+, for example, over the home that doesn't have that extra yearly expense?

Look at the bond being paid as an added feature of your home just like having a pool or an enclosed Lanai or any other feature that will make your home more attractive to potential buyers. Some of the bonds in the newer areas $40-$50K can add a significant yearly cost to owning that home with interest rates the way they are right now.

[Bill14564]

If you were in the market to buy a home and you had a choice of basically two identical homes priced the same. One with the bond paid and one not. Would you choose the home that has the added yearly expense of $1,500+, for example, over the home that doesn't have that extra yearly expense?

Look at the bond being paid as an added feature of your home just like having a pool or an enclosed Lanai or any other feature that will make your home more attractive to potential buyers. Some of the bonds in the newer areas $40-$50K can add a significant yearly cost to owning that home with interest rates the way they are right now.

If all else was the same then of course I would choose the home without the bond. However, if the home has been around long enough that an owner has paid the bond then it is unlikely that all else is the same.

For me, location mattered more than the yearly bond payment.

[Bilyclub]

Are these CDD bonds tax exempt municipals?

No, to the best of my internet knowledge. The developer was in a multi year battle with the IRS over taxes and the bonds that ended a few years back.