If you like to be aware of the current affairs then chances are you have been listening to news about the Winnipeg Impact Fee court hearing and alike. You might be wondering what this impact fee is, is it some sort of charge of some impact? Well here is some information about this impact fee:
Your local government will impose an impact fee only within the United States and yes it includes Canada as well. The purpose of the fee may be for a new or some ongoing urban development project to pay a small part of the accruing cost that is for public service specifically. Impact fee can reduce the ongoing economic burden on the local authority that will work for the growing population by starting more development projects.
How Do They Work?
An impact fee is an alternative to raising the property tax because it is often a case that property tax increases due to ongoing urban development projects or city expansion due to the increasing population. Though the new public services can be paid for some special assessment tax people having their property may find their developer pay a small amount of fee instead of increasing the tax. In such a scenario, the developer instead of the taxpayer will be responsible to cover the cost of the project which can be new infrastructure construction by their development.
However, sometimes developers may find the impact fee discouraging the overall investment because the impact fees can increase the overall cost of a large construction project. On the other hand, it has also been seen that these impact fees are also more efficient in increasing the revenue for infrastructure compared to the increasing property taxes because people often fail to fulfill them and they cannot complete the financial requirement as well.
Who pays impact fees?
Usually, the developers working on the project pay the fees because of their new project construction that requires to be extended of the existing town or infrastructure or upgrade of public services that will help the growing population requirement within the city. In the case of the Winnipeg impact fee, the charges were implied to the citizens that they will have to pay instead of the developer.
Who Can Charge Impact Fees?
Usually, the State law will authorize the legal authorities to legalize the impact fees from the property owners mostly after fulfilling certain conditions. For example, in several states, it is compulsory for the local government must first start with a plan that must include an infrastructure improvement plan first. This plan will also need to be updated after few years or perhaps annually. In other areas, before the implementation of impact fees, voter approval will be crucial.
What Does It Do?
Impact fees are very helpful in paying the cost of road repairs, creating or repairing the water and sewer lines, Repairing and construction of schools, park and trails, traffic system upgrades, and other services.
