Development Impact Tax is due when you obtain a building permit and upon issuance of a certification of final inspection.
of construction or improvement costs, or $1 per $100
Who pays the tax
Every entity that applies for a building permit for residential new construction over $15,000 must pay the tax. Owners who make improvements to their residential property that cost more than $15,000 must pay the tax if they are eligible for a property tax abatement. Residential property owners, including owners of mixed-use properties, must also pay the tax on the portion of the new construction or improvement used for residential purposes.
Building permits are issued by the Department of Licenses and Inspections. You must pay 50% of the tax when the building permit is issued and 50% when the certificate of final inspection is issued.
You must calculate your total construction costs when you submit your building permit application. If you need to adjust your construction costs, you must submit an amended building permit application in eCLIPSE before your construction is completed and your permit is closed.
Tax rates, penalties, & fees
How much is it?
The Development Impact Tax rate is 1% of construction or improvement costs. You can learn more about how to calculate these costs.
What happens if you don't pay on time?
If the tax is not paid in full and on time, you will accrue interest and penalties thirty days after the approval of final inspection. The City will also withhold your certificate of final inspection if you do not pay the tax.
For more information about rates, see our Interest, penalties, and fees page.
Discounts & exemptions
Are you eligible for a discount?
Discounts are not available, but some owners may be excused from paying the tax. For example, improvements to residential properties costing less than $15,000 may be excused from paying this tax.
Can you be excused from paying the tax?
You do not have to pay the tax if you are:
- Preparing an existing residential unit for turn-over to a new tenant.
- Making an improvement that is not eligible for a property tax abatement for some reason other than a tax delinquency. Property owners must pay the Development Impact Tax if their abatement applications are denied because of tax delinquency.
- Improving residential properties in Keystone Opportunity Zones that are exempt from Real Estate Tax.
- Performing ordinary property upkeep and maintenance.
How to pay
You must make two payments for the Development Impact Tax:
- Your first payment is due when you obtain your building permit.
- Your second payment is due when your construction is completed, before you are issued a certificate of final inspection.
How to calculate construction and improvement costs
Total construction and improvement costs are used to calculate the amount of tax owed.
For new construction, the total costs are calculated by eCLIPSE. This table shows you how construction costs per square foot are calculated by eCLIPSE, using locally adjusted International Code Council building estimates. You must pay 1% of the total construction costs.
|Construction type, based on fire-resistance rating||Adjusted construction costs per square foot based on International Code Council (ICC) estimates|
|Residential, one- and two-family||Residential, multiple family||Residential, care and assisted living|
Full definitions of construction types are available in the International Building Code.
To account for additional local costs, consider that:
- Estimated construction costs for residential multiple family structures with fire-resistance rating IA to IIB is 26% higher than the ICC.
- Estimated construction costs for residential one- and two-family structures with fire resistance ratings IIIA, IIIB, VA & VB is 39.9% lower than the ICC.
- Estimated construction costs for all other types is the same as ICC.
For improvements, enter the actual expected total costs associated with your project in the “Total Improvement Cost” field on your building permit application.
How to request a refund
You may apply for a refund if:
- The building permit for your construction or improvement expires and you have not performed the work.
- The Office of Property Assessment determines that your proposed work is not eligible for a property tax abatement. However, property owners must pay the Development Impact Tax if their abatement applications are denied because of tax delinquency.
To claim a refund, please complete and submit a General refund petition.