What are development charges or development levies?

/in , , , /by

Question: What are development charges or development levies?

Development levies are government charges (essentially a “tax”) that can be charged to the development of a condominium as a closing cost.  The levies are used to fund growth-related capital costs such as:

  • Childcare
  • Fire Facilities
  • Shelters & Housing
  • Police
  • Emergency Medical Services
  • Roads
  • Sanitary Sewers

For example, when a new 50 storey tower is built – the additional pipes, trees, schools etc. that need to be built to support the new towers are taxed based on the impact of the building. The developer, in turn, is able to pass those costs on to the buyer and development levy fees have been as little as $50 and as high as $25,000 per suite. One of the most important clauses in your agreement will be to “cap” those levy charges so that they don’t spiral out of control. If for example, you levies are capped at $5,000 and the levy charge is $25,000 – then you only pay $5,000 and the developer pays the additional $20,000.

Roy Bhandari