[kpd3062]

Looking at the tax bill for an existing home I see an ad valorem line and a non ad volarem line. Is the non ad volarem the bond?

[retiredguy123]

The non-ad valorem part is for the bond payments, fire rescue fee, and maintenance fee. Ad valorem means "based on value" which means that it is calculated based on the value of your house, whereas the non-ad valorem part is not based on the value of your house. The main reason to separate the two is that, typically, the ad valorem charges are considered taxes by the IRS and are tax deductible, but the non-ad valorem part are fees, which are not tax deductible.

[Stu from NYC]

Originally Posted by retiredguy123

The non-ad valorem part is for the bond payments, fire rescue fee, and maintenance fee. Ad valorem means "based on value" which means that it is calculated based on the value of your house, whereas the non-ad valorem part is not based on the value of your house. The main reason to separate the two is that, typically, the ad valorem charges are considered taxes by the IRS and are tax deductible, but the non-ad valorem part are fees, which are not tax deductible.

The bond gets paid to Sumter County? That is surprising to me thought it would be paid to an entity of the Village.

Why can they not use regular English?

When do you normally get invoice for bond an real estate tax? Will be the first one for us.

[retiredguy123]

Originally Posted by Stu from NYC

The bond gets paid to Sumter County? That is surprising to me thought it would be paid to an entity of the Village.

Why can they not use regular English?

When do you normally get invoice for bond an real estate tax? Will be the first one for us.

The tax bill typically comes out in early November. The bond payments for principal and interest are paid with the tax bill to the county, but I don't think the money actually goes to the county. It goes to the company who is hired to service the bond debt. It is a loan that you are paying off.

The developer borrows money from a bank or other financial entity to build the infrastructure, and then requires the home buyers to assume the loan. The loan payments show up on the county tax bill as a convenience to you and the lender.

[Stu from NYC]

Originally Posted by retiredguy123

The tax bill typically comes out in early November. The bond payments for principal and interest are paid with the tax bill to the county, but I don't think the money actually goes to the county. It goes to the company who is hired to service the bond debt. It is a loan that you are paying off.

The developer borrows money from a bank or other financial entity to build the infrastructure, and then requires the home buyers to assume the loan. The loan payments show up on the county tax bill as a convenience to you and the lender.

Thanks so much for the info. Still learning our way around here and still quite a bit to learn.

[mtdjed]

Note that once you get the tax bill, there is a slight savings if you pay it early . The schedule is shown on the bill.

[rjm1cc]

Originally Posted by Stu from NYC

The bond gets paid to Sumter County? That is surprising to me thought it would be paid to an entity of the Village.

Why can they not use regular English?

When do you normally get invoice for bond an real estate tax? Will be the first one for us.

The County is trying to minimize its expenses so this department contracts with the company holding the bond to collect the payments since it has very little cost in adding the charge to the bill it is already sending.

[bowlingal]

you can always go to the tax office at Pinellas Plaza for an explanation of the tax bill. They are very nice and helpful. Bring your bill with you when you go.

[kpd3062]

Originally Posted by retiredguy123

The non-ad valorem part is for the bond payments, fire rescue fee, and maintenance fee. Ad valorem means "based on value" which means that it is calculated based on the value of your house, whereas the non-ad valorem part is not based on the value of your house. The main reason to separate the two is that, typically, the ad valorem charges are considered taxes by the IRS and are tax deductible, but the non-ad valorem part are fees, which are not tax deductible.

Great thanks, I was trying to prepare budget for what to expect when we buy. Wanted to make sure bond was included In property tax bill and wasn’t looking at additional bill for that.

[Goldwingnut]

The bond is collected by the county as allowed under Florida. There is a 4% discount given for early payment of the county tax bill, this decreases as you get closer to the actual tax due day. The county then charges the respective CDD a 2% service fee for collection of the funds and pays the balance to the issuing CDD, not the bond holders or the developer. The CDD then has a separate budget from its general fund/maintenance assessment budget for each bond series that has been issued. Form these separate budgets annual payments are made to the bond service companies to pay off the bonds and pay the bond holders, these payments include both that annual collections through the tax collector as well as any payments residents who have paid off their bonds early. Both the 4% and the 2% are calculated into the annual budgets of both the bonds and the maintenance assessments that are collected in this method.

The developer does not borrow the money to create the bonds. The developer presents the plans and proposed costs to the CDD board and once approved the CDD board works with one of several major financial institutions to issue the bonds for public sale. One the bonds are sold, and funds collected, the funds are transferred to the CDD issuing the bonds and held in a special construction account. As work progresses the developer invoices the CDD for work completed and is only then paid.

It is this bond process allowed under Florida law that has helped The Villages be so successful. Without the bonds the development costs would have to be carried by the developer and would be rolled into the cost of each home as is the case in almost every other development. They would not start seeing recovery of these funds until late into the development and sales process. In the case of CDD-13 phase 1 (Bradford, Chitty Chatty, and Hawkins) this bond is $90,120,000.

Because the developer does not have to carry these costs and the associated interest their money is freed to invest in other aspects of the development - the amenities such as pools, rec centers, golf courses, etc. Unlike other communities you won't hear during the sales pitch "over there will be the swimming pool and that will the green for the 4th hole next year when the golf course is built", instead you hear "THAT IS the neighborhood pool and THIS IS green for the 4th hole of the (fill in name) golf course..."

Some here like the bond, some dislike it, and most don't understand it. Bottom line is that you would pay the development costs no matter what, either separately in the bond or rolled into the cost of the home. Many communities advertise "No Bond" as a selling point but don't disclose the fact that these costs and their interest are included in the home cost, here in The Villages we have a bond with each new home and it obviously appears to be working quite well.

[davem4616]

Lake county offers a 4% discount if you pay the entire bill by the end of November
The discount decreases 1% every month thereafter

not sure what Sumter County does

[champion6]

/////

[RealJudy]

Bond if there is a balance and maintenance, 2 line items.

[willbush]

Originally Posted by kpd3062

Looking at the tax bill for an existing home I see an ad valorem line and a non ad volarem line. Is the non ad volarem the bond?

Bond will show up as follows on tax bill under NON-AD VALOREM ASSESSMENTS as follows below followed by rate then amount. Ours is paid off so amount is 00.0
850B UNIT 150 SPEC ASMT-BOND Rate Amount

[Stu from NYC]

Originally Posted by Goldwingnut

The bond is collected by the county as allowed under Florida. There is a 4% discount given for early payment of the county tax bill, this decreases as you get closer to the actual tax due day. The county then charges the respective CDD a 2% service fee for collection of the funds and pays the balance to the issuing CDD, not the bond holders or the developer. The CDD then has a separate budget from its general fund/maintenance assessment budget for each bond series that has been issued. Form these separate budgets annual payments are made to the bond service companies to pay off the bonds and pay the bond holders, these payments include both that annual collections through the tax collector as well as any payments residents who have paid off their bonds early. Both the 4% and the 2% are calculated into the annual budgets of both the bonds and the maintenance assessments that are collected in this method.

The developer does not borrow the money to create the bonds. The developer presents the plans and proposed costs to the CDD board and once approved the CDD board works with one of several major financial institutions to issue the bonds for public sale. One the bonds are sold, and funds collected, the funds are transferred to the CDD issuing the bonds and held in a special construction account. As work progresses the developer invoices the CDD for work completed and is only then paid.

It is this bond process allowed under Florida law that has helped The Villages be so successful. Without the bonds the development costs would have to be carried by the developer and would be rolled into the cost of each home as is the case in almost every other development. They would not start seeing recovery of these funds until late into the development and sales process. In the case of CDD-13 phase 1 (Bradford, Chitty Chatty, and Hawkins) this bond is $90,120,000.

Because the developer does not have to carry these costs and the associated interest their money is freed to invest in other aspects of the development - the amenities such as pools, rec centers, golf courses, etc. Unlike other communities you won't hear during the sales pitch "over there will be the swimming pool and that will the green for the 4th hole next year when the golf course is built", instead you hear "THAT IS the neighborhood pool and THIS IS green for the 4th hole of the (fill in name) golf course..."

Some here like the bond, some dislike it, and most don't understand it. Bottom line is that you would pay the development costs no matter what, either separately in the bond or rolled into the cost of the home. Many communities advertise "No Bond" as a selling point but don't disclose the fact that these costs and their interest are included in the home cost, here in The Villages we have a bond with each new home and it obviously appears to be working quite well.

Thank you so much for the insight and info.

Understand there is very little reason for the homeowner to pay off the bond early. I believe we were given the discount info when we moved in but do not remember. By any chance does anyone know?