Development Charges Overview

What are development charges?

Development charges are fees imposed on land development and redevelopment projects to help pay for the capital costs of infrastructure that is needed to service new development.

Is my project subject to development charges?

You may be required to pay development charges for land development or redevelopment projects, if you are:

• Constructing a new building
• Making an addition or alteration to an existing building that increases the number of residential units or the non-residential gross floor area
• Redeveloping a property or making interior alterations that result in a change of use to all or part of a building

For a fulsome list of exemptions, reference should be made to the bylaw.

What are the City's development charge rates?

View the City’s current development charge rates.

How do I know what rate applies to my project?

Development charges are calculated at the rate in effect at the time of building permit issuance for all development with planning applications made prior to January 1, 2020.

Effective January 1, 2020, changes were made to the calculation of development charges in accordance with Bill 108, the More Homes More Choice Act.  For developments proceeding through site plan or rezoning bylaw amendment application submitted after January 1, 2020, development charge rates are “frozen” in accordance with the development charges bylaw in effect on the date a complete application is received. Pursuant to changes to the Development Charges Act through Bill 185, the Cutting Red Tape to Build More Homes Act, this rate freeze expires 18 months after the approval of the planning application.

Interest will be applied to the development charges payable from the time of the complete planning application submission date to the date of building permit issuance. The City’s interest rate is equal to the maximum interest rate set out in the Development Charges Act (i.e. prime plus 1 per cent).

Are development charges indexed?

The development charge rates in the bylaw are adjusted annually beginning on May 1, 2023 in accordance with the most recent annual change to the Non-Residential Building Construction Price Index (Toronto). The City will not be adjusting the rates on November 1, 2022, which was the index date in the 2018 development charges bylaw.

When are the development charges payable?

Development charges are payable and collected on the date that a building permit is issued in relation to a building or structure on the land to which the development charge applies.

Where a development charge applies to land in relation to which a building permit is required, no building permit will be issued until the development charge has been paid in full.

In some cases, the legislation or agreements may change the payment timing. Development charges for rental and institutional projects are deferred to occupancy and payable in instalments with interest under section 26.1 of the Development Charges Act and are not required to be paid as a condition of building permit issuance. Go to Deferred Development Charges for more information.

The City also has a development charges deferral program for laneway and garden suites. Refer to the Laneway and Garden Suite Development Charges Deferral Program for more information, including eligibility criteria and application process.

Who do I contact for calculation and payment of development charges?

Toronto Building Customer Service
Telephone: 416-397-5330

What is the process if I have concerns about the calculation of a development charge?

View the City’s process for responding to concerns about the calculation of the applicable development charge.

What services are included in the development charge?

Development charges help pay for growth-related capital costs for the following municipal services:

• Spadina Subway Extension
• Transit
• Roads and Related
• Water
• Sanitary Sewer
• Storm Water Management
• Parks and Recreation
• Library
• Affordable Housing
• Shelter
• Police
• Fire
• Ambulance Services
• Development-Related Studies
• Child Care
• Waste Diversion
• Long Term Care

When did the current bylaw come into effect?

Council of the City of Toronto enacted Development Charges Bylaw 1137-2022 on August 15, 2022 in accordance with the requirements of the Development Charges Act and related Regulations.

Are exemptions available for development charges?

Exemptions available through the Development Charges Act and the Ministry Of Training, Colleges and Universities Act include:

• a board of education;
• any municipality or local board thereof;
• the enlargement of an existing dwelling unit;
• the creation of additional dwelling units in existing and new residential building, as prescribed, subject to the restrictions in Section 2 of Ontario Regulation 82/98, and
• the enlargement of an industrial building up to a maximum of 50% of the original gross floor area of the structure that existing before the date the development charges bylaw came into effect
• land intended for use by a university that receives regular and ongoing operating funds from the government.

Exemptions available through bylaw include:

• Public hospitals, as defined
• Non-Profit Hospices, as defined
• Industrial uses, as defined
• Colleges, as defined
• Non-ground floor non-residential uses
• Intensification of housing, for the second, third and fourth unit of a residential dwelling building, with certain conditions
• Housing or facilities provided pursuant to a municipal capital facilities agreement
• The creation of an additional dwelling unit, pursuant to 2(3) and 2(3.1) (b) of the Act
• Places of worship, including one clergy residence located in a place of worship, cemeteries or burial grounds
• Temporary sales offices or pavilions associated with the sale of new residential development to the public
• Accessory uses not greater than 10 square metres
• Dwelling rooms within a rooming house

The owner or applicant is required to provide evidence to the satisfaction of the City that the owner or applicant is entitled to any exemption from the payment of development charges. Consult the bylaw and the legislation for the full list of exemptions.