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Frontage Costs for Sewers Add to House Costs

In many municipalities across Canada, the cost of extending sewer/water services from a main line to a new, subdivided or unserviced lot is the responsibility of the landowner or developer. Particularly, in rural communities where businesses wish to construct a facility that is not able to be served by the existing water line, those businesses often pay the full cost of new water services infrastructure, minus any provincial or federal government contributions.

In 1999, Toronto reconsidered its policies on reimbursement for extension of water services to unserviced lots, in order to bring it in line with the practices of nearby communities. This change in policy is often unnoticed by homebuyers, until the developer levies the charge against the cost that he has incurred, or the city seeks to recover a portion of those costs. The costs can be quite significant!

Sewer line costs are calculated on the basis of the length of the line, or a per-meter basis. In recent years, those costs have increased by more than 280%. Where a prospective buyer of a new home is considering a new development community, it is imperative that he inquires about all costs, including any one-time or ongoing levies.
While the city of Toronto reimburses new water services clients a portion of the construction costs, those fees are less than 50% of the actual construction costs.

One of the ways to mitigate the buyer’s frontage costs is to look for homes on lots that run lengthwise into the property, rather than across the property face. Vertical construction such as this will reduce the lot width demand, and, in turn, reduce water services charges. Even where the developer has absorbed the costs of infrastructure into the purchase price, the narrower lot should result in a lower cost for a lot of the same square footage but wider frontage.

Perhaps the most effective way to ensure that you are not absorbing more than your share of the cost of development for your home site subdivision is to use the services of a realtor. The experience of a professional realtor, much like the expertise of a lawyer or doctor, is the best return on investment that you can make, when making the largest purchase of your life.

Trademarks owned or controlled by The Canadian Real Estate Association. Used under license.

The information provided herein must only be used by consumers that have a bona fide interest in the purchase, sale or lease of real estate and may not be used for any commercial purpose or any other purpose.

Information is deemed reliable but is not guaranteed accurate by TREB.

Toronto Real Estate Board - IDX Last Updated: 10/22/2019 8:29:46 AM