Impact Fee
Also known as: Development Impact Fee, Infrastructure Fee
A one-time fee charged by local government to developers (and sometimes passed to buyers) to fund public infrastructure needed to support new development — such as roads, schools, parks, and utilities.
Detailed Explanation
Impact fees help local governments pay for the infrastructure burden created by new development. When a builder constructs hundreds of homes in a community, the local roads, schools, water systems, and parks all need to accommodate the new residents.
Builders typically pay impact fees as part of their development costs and factor them into the home's price. However, in some cases, impact fees may appear as a separate line item on your closing statement.
Impact fees are a one-time cost, unlike CDD or Mello-Roos assessments which are recurring annual charges.
In Your Contract
Impact fees may appear in your closing costs or be bundled into the purchase price. Ask the builder whether any impact fees will appear on your closing statement.
Key Points
- 1One-time fee for public infrastructure: roads, schools, parks, utilities.
- 2Usually paid by the builder and included in the home price.
- 3Sometimes passed to the buyer as a separate closing cost.
- 4Different from CDD or Mello-Roos (which are recurring).
- 5Amount varies significantly by jurisdiction.
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