Anyone who has visited one of Disney World’s value resorts in Lake Buena Vista knows that the area is anything but ordinary. In addition to its world-renowned theme parks, the gated community offers residents access to exclusive shopping, dining and entertainment options, as well as a host of other benefits. Operators must pay special attention to these communities in order to guarantee that all resident amenities are consistently accessible and operating at peak performance year-round. However, it doesn’t take an accountant or tax expert to realize that living within this type of environment comes with a considerable cost. That is why we have compiled information on the types of special taxes you may face if you are interested in purchasing property in one of these communities.
What is a Special Tax?
A special tax is a tax imposed on the sale or transfer of property, such as land or buildings, in real estate. The primary purpose of this tax is to pay for the expenses associated with managing the property and its amenities.
In general, the buyer is responsible for paying all taxes related to the sale of the property. That said, some communities charge a special tax that’s paid by both parties. These types of special taxes are typically related to specific facilities or services provided in these communities, such as roads maintenance or water supply. The following are examples of common special taxes:
Taxes payable by buyers when they purchase land in a taxable area
There may be an additional tax payable by buyers when they purchase certain land in a taxable area
There may be an additional fee payable by buyers after purchasing certain land in a taxable area
DTC: An Introduction
to Disney Special Tax Districts
The Disney Special Tax District (DTC) is a five-mile stretch of land in Lake Buena Vista, Florida that was originally created to generate funds for the construction of Walt Disney World. The DTC is now a thriving commercial center with attractions that include Downtown Disney, Pleasure Island, and the ESPN Wide World of Sports Complex. It also has a specific set of rules about how businesses are allowed to operate within its boundaries. Those rules are dictated by the Walt Disney Company and make up one of the many unique aspects of living in this area.
The most important thing to know about living in a DTC is that there are special taxes that residents must pay. These special taxes are based on where you live and what type of property you have purchased within the district. Additionally, these taxes differ based on whether or not your property is occupied at all times or can be rented out as an income generating property on Airbnb. When someone purchases a property within the district, they may be required to pay a tax rate between 25-100 percent on any earnings they receive from their property.
DDA: An Overview
The Disney special tax district (DDA) is a subdivision of land within the city limits of Lake Buena Vista, Florida. Real estate in the DDA is either owned by Disney or leased to businesses that operate within Disney World. The DDA was created with the purpose of providing exclusive amenities to residents who reside in its boundaries. For example, there are multiple golf courses and golfing facilities located within the DDA, as well as many other recreational opportunities for residents.
While it may be tempting to purchase a home in the DDA if you have an interest in living close to your favorite theme park, there are certain taxes associated with this status. To help make things easier for prospective property buyers and sellers, we have included information about these taxes below:
Downtown Disney Marketplace Improvement District
The Downtown Disney Marketplace Improvement District (DDPID) is levied on all property within the district and is designed to raise funds for the expansion, improvement, and maintenance of Downtown Disney.
A special tax on residential properties that are assessed at $1,000 or more per year will be assessed on the total value of the property, excluding building improvements. The rate of this tax will be capped at 15 percent. There is no cap on the amount collected from businesses in the DDPID. A property owner may also choose to opt out of this levy by opting out with a written notice before their first assessment date.
If you are interested in purchasing a home in Lake Buena Vista, Florida and one of these unique communities, it’s important to know about these types of special taxes that may apply to you.
Disney Vacation Club (DVC) Tax
Disney Vacation Club memberships are available for a variety of Disney World resort destinations. Members must pay an annual DVC tax, which is based on the number of points in their membership. The point system is designed to offer a variety of vacation options for residents and in order to maintain a high level of customer satisfaction and satisfaction, the cost of these community amenities is significantly higher than those found at “tourist” resorts.
If you purchase your property within a Disney value resort, there are additional taxes that will be incurred by the developer when you purchase your lot or parcel. These taxes include:
1) Developer’s Fee: This fee helps cover costs related to acquiring, developing and managing the property. If you own your lot or parcel directly, this fee will only be applicable if you are responsible for maintenance on your property or incur expenses related to it. 2) Property Tax: This tax is determined by the county where the neighborhood is located in Florida and as such, can range from $4/year to more than $100/year depending on what type and how much land you are purchasing. 3) Certificate of Occupancy Fee: This fee pays for administrative fees associated with regulating construction projects within the development limits. 4) Utility District Assessment: This fee pays for utility assessments based on demand (power usage), whereas other neighborhoods may require this assessment but not pay it out until all homes have been constructed and substantially occupied.
Hotel Occupancy Tax (HOT)
The hotel occupancy tax, or HOT, is an excise tax collected from hotels. This tax is collected on a per-room basis and is imposed in addition to the standard state and local taxes. The purpose of this tax is to generate revenue for the government by collecting fees on room rentals.
This tax was first adopted in Florida back in 1993 and has been implemented for many other states that have followed suit. The amount of money collected on each room depends on the number of rooms in the hotel. All hotels must pay a minimum of $2 per day per room that they rent to guests. However, many hotels collect more than this minimum amount by charging a premium price for their rooms during peak season.
There are some exceptions to these rules that apply to hotels within certain zones within Florida’s special tourism districts (excluding Orlando). These zones allow hotels to offer lower rates during off-peak times and even allow them to waive the mandatory nightly fee completely.
There are many factors to consider when looking for a place to live, and one of them is the tax implications. Living in Disney is a fun and exciting experience, but it does come with some unexpected taxes attached that homeowners need to be aware of.
The first one is the DTC tax. This tax is assessed on the value of the vacation points that you have accumulated with Disney Vacation Club. This type of tax is non-refundable, which means that you don’t get any of the revenue back (even if you don’t use all your vacation points).
The second one is the DDA tax. This tax applies to homeowners and non-homeowners alike who live in the Central Business District. The tax is assessed on the value of the property, which is determined by how many square feet it takes up.
The third one is the HOT tax. This type of tax applies to homeowners and non-homeowners alike who live in a hotel in the Central Business District. It’s assessed on a nightly basis and is calculated at 12% of your hotel bill.
And finally, there’s the DVC tax. This tax applies to Disney Vacation Club members who live in Disney Resort hotels