I guess it depends on the market. You may not accept an offer with a deducted bond, but other sellers will. Having a bond gives the buyer more options. If they don't want a bond, they can just pay it off. If they want a bond, they can keep it. But, once the bond is paid off, it cannot be reinstated. In some cases, a paid off bond can prevent a sale because the buyer cannot get a mortgage high enough to cover the paid off bond amount that the seller has included in the sale price.

Interesting. The IRS differentiates a tax from a fee. For example, some states charge a car tax, based on the value of your car. I believe this is a tax deductible expense. But other states charge an annual registration fee to register your car. The IRS calls this a fee, not a tax, and it is not deductible. But, both charges are basically used for the same purpose. I think they would call the fire department charges a fee, not a tax.

I can assure you, that's the case. Had I thought of it, I would have been right on it! I just emailed my tax accountant to remind her for next year :a20:

As I said before, you can deduct anything you want as long as the IRS doesn't audit you. Good luck.

Isn’t all homes in villages over stated? All things being the same including price who buy one with bond? One who likes to give money away. :p

And by time you get audited you will own thousands in penalties.

The general IRS penalty for inaccuracy (claiming a deduction that's disallowed), is 20% of the portion of the under-payment. If someone was to inaccurately deduct all or a portion of their Maintenance/Amenity Fee, at a 22% Tax Rate, the Penalty would be around $100 (although there may be a "minimum penalty of $435?).

$225/month = $2700. $2700 * 22% = $594. $594 * 20% = $118.

Not giving tax advice, only math assistance.

The annual maintenance fee is not the same as the monthly amenity fee. Different amounts and used for different purposes.

Apples & Oranges. The IRS has already said that CDD Bond Payments are not deductible.

If there's been an IRS decision if some portion of the monthly fee is deductible, I don't have a clue. I was only speaking of that fee ... which I suspect has no chance of being a legitimate deduction.

Yes, apples and oranges and kumquats. You mentioned the maintenance/amenity fee but those are two different things. The annual maintenance fee and the bond are also two different things.

Monthly: amenity fee
Yearly: maintenance fee
One time: bond (though that is amortized over 30 years)

Executive summary:
As a buyer of a property in the Villages:
your financial situation, cash or mortgage,
your urgency to move to the Villages,
the particular properties and the sale prices while you are looking,
the bond status and
your negotiation skills
will all factor into your decision of which house to buy.

Correct! as always.

Because the bond is not part of the appraised value of the home by the bank, and the bank will own the house, not you. You are renting the property from the bank, or renting the money, which ever way you want to look at the rental. The market price is determined by the buyer and seller accepting an assumed fair price for the property, whether or not it is fair is the judgement of the observer.

Two same size models on the same street, with the same acreage,
Both houses will be appraised for about the same price by the bank.

House A has no bond and the price is set at $500,000
House B has the bond payment and the price is set at $500,000

For the buyer, house A is the cheaper house
For the seller, house B is the better return on cash / capital spent.

House C has no bond and the price is set at $530,000, including recouping the bond
House D has the bond payment and the price is set at $500,000, with a $30,000 bond remaining.

House C appears to be more expensive, and would most likely be the second choice,
House C would not appraise well for the mortgage, but House C may get an all cash sale offer,
(no mortgage) or House C may get a negotiated reduction, may be equal to or better than the house D.

part of the final agreed price are factors hidden/unknown by the final sales price:
the time frame the seller has to sell the house, willingness to take a discount
the buyer's interest in that particular house, based upon intangibles of the location, view, tree, color, and the direction of the market prices in the recent past, as a real estate buy is an emotional based transaction.

But if you read all the comments, many to most people will not consider the bond balance nor payment in the agreed upon sale price of the house, because they want the house for whatever reason. And House C seller may turn down everything but the full sale price.

So as a buyer of a property in the Villages, your financial situation, your urgency to move to the Villages, the particular property and the sale price, the bond status and your negotiation skills will all factor into your decision.

so there really is no one correct answer. .

good luck!

retired finance guy

You're correct and your wording is much more precise than what I used. In which case, the questions (regarding the deductibility for tax purposes), are:

The Bond Payment (& associated interest) is clearly not deductible. Common sense would suggest that's it's simply a capital cost when buying your home. In a more traditional arrangement (non CDD), the Developer would have paid for the infrastructure and that cost would be reflected in the price of the house. In the case of TV, the cost of the home is separated into (2) parts ... the home itself and the infrastructure. No reason it should be deductible.

Maintenance costs for the CDD, which under a more typical scenario (again, non-CDD community), that amount would generally be included in the Ad Valorem tax bill? Which would make it Tax Deductible.

The Amenity Fee is a horse of a different color. Things like maintaining "walking paths", dog parks, etc., would normally be carried in a town's budget, included in taxes and be deductible. I'm guessing (& admittedly, I don't have a clue) in TV, they're carried in the Amenity Fee and not in the Maintenance Fee? It seems they should be deductible for CDD residents, as they would be for residents of a traditional government authority. I can understand why the portion of the Amenity Fee that provides for maintenance of the clubhouses & Executive Golf courses may not be deductible, although that's a rather fine distinction. If a town has a "community house with a swimming pool" and included the expense in it's general budget, it would become part of one's annual tax bill and be deductible.

City Taxes Too
 

Watch out for city taxes south of 44, especially in new construction areas too. Some can run almost as much as a bond payment annually. New construction areas were snagged up by Leesburg and Wildwood so they could fatten their pockets for pet projects that have nothing to do with the Villages. A huge swath of the Villages north of 44 don’t pay a dime because they are unincorporated.

Hint, you keep paying these for life, even if your bond was paid off tomorrow.

The bond is a sweet deal for the developer, they don’t pay impact fees which average 25,000 per lot throughout the state of Florida. Instead your bond amount is double what most are.

The short honest answer is avoid a bond. There are PLENTY of great homes in the villages with no or little bond remaining. If you insist on a new build, then you’ll get a bond. No one likes stroking a check for something they can’t “touch” or an effusive indirect service.

Avoid Realtors
 

This house just sold a couple days ago and no realtors were involved.

4160 Deskin Ln, The Villages, FL 32163 - MLS G5075727 - Coldwell Banker

Bond was paid off. Check all avenues, You save 10s of thousands if sales commissions aren’t involved. The prices are often inflated by sellers who have to pay for sales agents. Check Zillow, Redfin etc. There are some real bargains. Home prices have been dropping.