EDC and IDC: Understanding Real Estate Development Charges
EDC and IDC are acronyms commonly used in the real estate industry to refer to External Development Charges and Internal Development Charges. These charges are levied on real estate developers by local authorities to fund infrastructure development in and around the project area.
EDC (External Development Charges):
Purpose: To fund essential infrastructure facilities outside the project boundaries.
Examples: Roads, bridges, water supply networks, sewage treatment plants, parks, and public transportation.
Calculation: Usually based on the size of the project (e.g., per square meter or per acre).
IDC (Internal Development Charges):
Purpose: To fund infrastructure facilities within the project boundaries.
Examples: Internal roads, electricity, water supply, sewerage systems, landscaping, and recreational facilities.
Calculation: Typically based on the built-up area or unit size of the property.
Why are these charges levied?
Infrastructure Development: To ensure that new developments contribute to the overall development of the area and don't strain existing infrastructure.
Fairness: To ensure that developers bear their fair share of the costs associated with providing essential amenities.
How do these charges affect homebuyers?
Indirect Costs: While these charges are typically paid by developers, they are often passed on to homebuyers in the form of higher property prices.
Transparency: It's important for homebuyers to be aware of these charges and their potential impact on the final cost of a property.
In conclusion, EDC and IDC are essential components of real estate development. Understanding these charges can help homebuyers make informed decisions when purchasing a property.