Answered by: Mark Key
Q We're trying to decide whether to buy or build. What are the 'impact fees' we've heard about on new houses?
A Impact fees are taxes. They are a new kind of tax that many cash-strapped cities are assessing on remodeling and new home construction. Depending on where you live, they can be substantial. You won't find 'impact fees' in every city or county.
You'll find impact fees used in some cities in South Carolina, California, Oregon, Florida, Colorado, Arizona and Washington. Typically the fees are assessed by cities to pay for new roads, parks, and sewer lines.
According to Duncan Associates, a Texas consulting firm that tracks them, impact fees can add an average of $10,500 to the cost of a new home in cities where they are imposed. Of course, many cities have substantially smaller fees.
Property rights advocates are against the fees, saying local governments are just afraid to go to taxpayers to ask for more money. But proponents say the taxes are fair because they are targeted at the very people who are causing an impact on the city services: builders of new houses.
In any case, these fees are rarely assessed on the sale of an existing property (though the fees could raise the price of a property.)
This is something to consider when pondering whether to build or buy. You can easily check to see if a locality assesses impact fees by checking with the city building permits department.
If you have a question you want to ask, email me at MKEY@REALTYUSA.COM We'll be glad to help.
Feel free to ask a question in the Q&A BOX at the top of the page Sarah Harrison gave me permission to use her question and answer on this blog.
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