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Development Charges - Much lower outside of the Greater Toronto Area

Posted on December 11, 2025 by John Owen

Posted in taxes

Development Charges - Much lower outside of the Greater Toronto Area

There has been much discussion in the media recently regarding housing affordability and how development charges (and other taxes) drive up the cost of new homes.

There has been little coverage, however, on how these charges compare to areas outside of the GTA. Development charges are fees collected from property developers (builders) by a municipal and/or regional government when a building permit is issued.

The concept of development charges is largely unseen outside of Ontario. What is more common is to see levies for connecting municipal services to properties.

They are typically incorporated into the selling price of new homes. In the GTA, there are two different scenarios, as the City of Toronto has no regional municipal government. It is, therefore, single-tier. The other municipalities in the GTA have two tiers - the municipality itself, and the region. In Durham Region, for example, the City of Oshawa and Region of Durham both assess development fees.

In order to be objective, we need to add all fees from both tiers when looking at different cities. Furthermore, there are different types of development fees collected in different municipalities. In Markham and Durham Region, for example, there are area-specific charges for some locations. Typical of government, everything is clear as mud! To make things somewhat clearer, I will break this down into comparisons for two types of properties - single family detached houses and one bedroom apartments (condos). I will refer to the former as a house, and the latter as a condo.

Looking at Toronto, the current development charge for a house is $137,846. For a condo it is $52,676. In Kingston, the current development charge for a house is $31,026 . For a condo, Kingston charges $12,610.

How about municipal property tax rates? In Toronto it is 0.754%. In Kingston (Central), the current rate is 1.552%. Effectively, the rate is double in Kingston.

There is much speculation about the distribution of different revenue streams for different cities. In these examples, there appears to be a much higher burden placed on buyers of new homes in Toronto, than on existing homeowners (higher development charges and lower property tax rates).

Additionally, a lack of clear guidelines from the provincial government makes this much more difficult to analyze and understand clearly. It would be helpful to have very clear guidelines on how development charge revenues could be spent. It would also be helpful to have limits on these charges to help mitigate the impacts on affordability.

It seems that municipal governments in some areas have made efforts to fund projects well outside the established scope of either development charges or municipal responsibility.