Impact Fee

AAA

DEFINITION of 'Impact Fee'

A fee imposed on property developers by municipalities for the new infrastructure that must be built or increased due to new property development. These fees are designed to offset the impact of additional development and residents on the municipality's infrastructure and services, which include the city's water and sewer network, police and fire protection services, schools and libraries.

These fees can also be levied against any individual or entity where its actions create an externality within a municipality.

INVESTOPEDIA EXPLAINS 'Impact Fee'

Some U.S. states attempted to institute an impact fee on individuals who owned vehicles registered in another state, who then subsequently registered that same vehicle in their homestate. This smog impact fee was eventually overturned by the U.S. courts, who stated the fee was unconstitutional on the grounds that it unfairly discriminated against persons from other states.

RELATED TERMS
  1. Externality

    A consequence of an economic activity that is experienced by ...
  2. True Cost Economics

    An economic model that seeks to include the cost of negative ...
  3. Land Rehabilitation

    A re-engineering process that attempts to restore an area of ...
  4. Social Responsibility

    The idea that companies should embrace its social responsibilities ...
  5. Domini 400 Social Index

    A market cap weighted stock index of 400 publicly traded companies ...
  6. Property Tax

    A tax assessed on real estate by the local government. The tax ...
Related Articles
  1. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  2. Home & Auto

    Uncover The Next Real Estate Hot Spot

    Real estate land speculation is a way to get in on a hot investment before a boom hits.
  3. Home & Auto

    Exploring Real Estate Investments

    Discover how owning properties can give you a roof over your head or a check in your pocket.
  4. Taxes

    OK, So I'll Be Smarter Next Tax Time

    5 tax resolutions to start on right now for a smoother tax return next April 15.
  5. Taxes

    What To Do If You Lost Your W-2

    There's no need to panic if you don't have your Form W-2 to file taxes, there are easy ways to gain access to the missing form or file without it.
  6. Taxes

    What is the Effective Tax Rate?

    The effective tax rate is the average rate at which an individual or corporation is taxed per year.
  7. Professionals

    Vanguard Readies Muni Bond ETF

    Vanguard is set to roll out a muni bond ETF, the firm's first.
  8. Taxes

    Business Taxes: Not Paying More Than You Have To

    If you're a small business owner, note these potential tax deductibles so that you don't pay taxes that could have been extra revenue in your account.
  9. Taxes

    How To Arrange An Installment Agreement For Taxes

    Not enough cash on hand for your April 15th tax bill? No need to panic. Here's what to do.
  10. Professionals

    IRA Holders Face New Rules in 2015

    New rules for IRA holders mean less loopholes in 2015.

You May Also Like

Hot Definitions
  1. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  2. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  3. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  4. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  5. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  6. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
Trading Center