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Impact Fees

Learn about impact fees in Canadian real estate — what they fund, when they apply, and their role in development budgeting.

Impact Fees

July 29, 2025


What is Impact Fee?

Impact fees are charges levied by municipalities on new developments to offset the cost of additional public infrastructure and services required by growth.

Why Gentrification Matters in Real Estate

In Canadian real estate development, impact fees help fund schools, parks, roads, and utilities needed for expanding communities.



Key features:
  • Collected at the time of permitting or subdivision
  • Used for growth-related infrastructure
  • Applied to residential, commercial, or industrial projects



Understanding impact fees helps developers budget and plan for project feasibility.

Example of Gentrification in Action

The developer accounted for impact fees related to new park construction when preparing the project budget.

Key Takeaways

  • Funds growth-related infrastructure
  • Charged on new developments
  • Supports schools, parks, utilities, and roads
  • Adds to project development costs
  • Ensures community services keep pace with growth

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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