Impact Fees
Impact fees are one-time charges imposed by local governments on new development projects to help fund the infrastructure and public services needed to support the additional population or activity. These fees cover costs for schools, roads, parks, water systems, and other municipal services.
Example
“The developer paid $15,000 in impact fees to help fund new roads and utilities needed to support the housing subdivision.”
Memory Tip
Think 'Impact = I Must Pay for Additional Community Taxing' - fees you pay for the impact your development has on the community.
Why It Matters
Impact fees can add thousands of dollars to the cost of new construction, affecting both the final price you pay for a new home and the overall development timeline.
Common Misconception
Many buyers think impact fees are just another tax, but they're actually user fees designed to ensure new development pays for the infrastructure it requires.
In Practice
When building a new home in a growing suburb, the developer might pay $15,000 in impact fees to the city, which typically gets passed on to you as part of the home's purchase price.
Etymology
Impact fees emerged in the 1970s from the English word 'impact' (from Latin 'impactus' meaning 'driven in') to describe fees that address the effect new development drives into existing infrastructure.
Common Misspellings
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