When a developer receives their building permit, the city issues them a tax, which is called Development charges/levies. The reason developers are required to pay theses levies is that the city needs money to maintain all the infrastructure needed to serve all the new residents of the newly built homes from roads, sidewalks, lamp posts, parks, libraries, police, transit, hospitals and schools.

The city spreads the cost out by the total square footage of the proposed building and the developer pays by unit, so depending on the size of the unit you buy, those fees might be passed on to you. The main development charges are:

Education Levies

These are levies dedicated specifically for building new schools in the city.

Section 37 Levies

These levies are essentially cash payments builders can sometimes make to the city in exchange for zoning approvals or extra density.

Public Art Levies

Similar to section 37, the builder agrees to create public art displays in the development in exchange for zoning approvals. The cost of the public art is sometimes passed on to purchasers who pay their proportionate share.

Parks Levies

These levies are to build new park space in the city.

Other “Municipal Charges”

These charges started since 2018. A generic heading which could be anything.

When you purchase a pre-construction home or condo from a developer, plan your purchase to take development charges and other closing costs into account.

Development charges are not charged by the city until final closing. So you don’t know what the city is going to charge because the building won’t be completed for 3-4 years after you sign your contract.

When you cap your development charges, this means that they cannot exceed the capped amount. Always have a lawyer review your agreement of purchase and sale and any disclosure included in the contract to know exactly how the levies are being paid.

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