What are the Life Cycle Costs of Impact Fees?

See how Palm Coast’s Impact Fees, totaling $14,747.22, cost a homeowner (and neighbors) $34,247.14 over 30 years by increasing doc stamps, down payment, mtg. payments, real estate taxes, and insurance

PALM COAST, FL – August 9, 2017 – Since I wrote “A Hidden Tax on Housing – The Impact of Impact Fees”  ten days ago, several readers have asked for more details, so here they are.

Palm Coast’s Impact Fees for each newly permitted single-family home total $14,747.22 (regardless of the value of the home) as follows:

 Park System Impact Fee


 Fire & Rescue System Impact Fee


 Educational Facilities Impact Fee


 Transportation Impact Fee


 Water System Contribution in Aid of Construction


 Sewer System Contribution in Aid of Construction


Impact fees are paid by the builder and passed onto the buyer, inflating the contract sale value by $14,747.22. Increasing the new home’s selling price by including Impact Fees has a domino effect.

Raising the price of the new home means the buyer will need more money. Assuming a typical 80/20 mortgage, the required 20% down payment will be $2,949.44 greater. And the mortgage principal will be $11,797.78 greater.

Assuming a 30-year mortgage at 4.0% and current Palm Coast property tax millage rate, here’s the cumulative effect of the Impact Fees over the life of the loan.

 Additional Down Payment


 Mortgage Pmt. Increase ($56.30 per month)


 Additional Deed Doc Stamps


 Additional Intangible Tax


 Additional Mortgage Doc Stamps


 Additional Real Estate Taxes ($300.68 annually)


 Additional Property Insurance Premium ($61/yr)


     30-Year Life Cycle Impact Fee-related Costs



Get your neighbors involved

New homes generally sell at a premium price, typically between 15% and 20% above comparable existing homes. Prices for existing homes rise in lockstep with increased new home prices. Regardless of whether or at which rate Impact Fees were paid on the neighboring existing homes is irrelevant. The prevailing market conditions that determine the spread between new and existing home prices bakes the current Impact Fees into existing home prices (and assessed values) too. Meaning all pay more. If you live in an existing home but are not selling, the Impact Fees still affect your assessed value (real estate taxes) and property insurance premium.

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