Development charges are fees municipalities, regions and school boards levy on new construction to help fund the infrastructure — roads, sewers, transit, schools, parks — that new housing creates demand for. They’re a real cost of building in Ontario, and how they get passed on to buyers is one of the most important things to understand before signing a pre-construction agreement.

What Development Charges Actually Are

These charges are set by municipalities and other levels of government and are paid by the builder when the project is developed. They apply broadly across new construction in Ontario and can represent a meaningful cost per unit, though the exact amount varies significantly by municipality and project type.

Are They Included in Your Purchase Price?

This is the critical question — and the answer depends entirely on how your specific Agreement of Purchase and Sale is worded. Some builders build development charges into the advertised price and cap what you’ll pay. Others pass them through separately, sometimes with a capped adjustment clause, meaning the exact dollar amount owed at closing isn’t fixed at the time you sign. Never assume they’re included just because they aren’t mentioned upfront — this needs to be confirmed in writing.

Why This Matters for Your Closing Budget

An uncapped or poorly capped development charge clause is one of the most common sources of a larger-than-expected bill at final closing. This is exactly the kind of clause a real estate lawyer should specifically flag during your 10-day cooling-off review (see our 5 things to check before signing guide) — ask directly whether development charges are capped, and if so, at what dollar amount.

Rules and Rates Change — Confirm Current Numbers

Development charge rates are set and periodically adjusted by individual municipalities, so they vary by city and change over time. The mechanism described here has been stable, but always confirm the specific charge structure and any cap for your project with your lawyer before you sign.

How We Help

We flag how each project we work with handles development charges — capped, included, or passed through — before you register interest, so you go in with realistic closing-cost expectations.