Peel Council Approves Development Charges Rate Hike

Some bad news for new home and condominium buyers in the Peel Region as the council today approved a rate hike for development charges that could cost new home buyers as much as an additional $18,000.

The new development charges come in to effect on October 4th, 2012 and will be as follows:

Type	Old Development Charge	New Development Charge	Difference
Single Family Residential	$17,629	$35,352	$17,723
“Small” Condominium	$6,548	$13,198	$6,650
“Large” Condominium	$12,592	$25,380	$12,788

So what does this all mean? It means that beginning next month, it will cost developers more to build a new home or condominium with the new rules.  It does not necessarily mean that this increased cost will be passed on to the buyer.

Many condominium developers will include a development charge “cap” that means buyers will only pay up to a certain amount (usually ranging from $0 to $8,000 depending on the location and size of your condominium).  These caps are not typically automatic and needs to be negotiated.

If, however, you do not have your development charges capped then you could be faced with a larger-than-expected surprise come closing.  It is now more vital than ever to have good representation to make sure you ask the right questions when purchasing new condominiums or homes.

It has been noted that these development charges will be for NEW projects only, and not for homes or condominiums purchased prior to October 4th.

Development charges or “levies” are one of the most important closing costs to understand and one of the major clauses that any (good) lawyer will bring to your attention when reviewing new home and condominium purchases.