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

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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