All about Infrastructure Development Charges (IDC)

Infrastructure development Charges(IDC) are a very common term in the real estate industry. This fee is charged to all real estate developers. These are imposed by local administrative bodies like municipalities. Usually, this fee is taken by these governing authorities to fund several public constructions or reconstruct and renovate various public facilities. IDC is levied when any developer goes for approval of the real estate construction. During the building permit, the fees must be paid to the authority. These infrastructure development charges have an impact on different public services. These developments help to enhance the overall growth of a place.

Table of Contents

What are Infrastructure Development Charges(IDC)?

Real estate developers need to pay a charge to obtain a permit to construct structures from local administrative bodies like municipalities. This fee is known as the Infrastructure Development Charge or IDC. These fees are used in developing parks, roads, drainage systems, electric poles, etc.

Why are the Infrastructure Development Charges important?

To develop any community, IDC is very crucial. It is sharing the overall social burden of maintaining public properties. The local administrative authority collects funds from developers and engages the funds in different projects, such as road construction, water supply systems, drainage systems, school repairs, park maintenance, etc.

But while collecting the development charges, the authority must ensure that they will maintain complete transparency in organizing and funding the money to develop such public properties. The local authority must support all kinds of barriers to avoid misuse of the funds. This is a good way to maintain a sustainable financial model across the locality. These charges are also helpful in public planning. The fees also allow the design of a well-planned community and social structure.

How to calculate Infrastructure Development Charges?

The Infrastructure development charges are not fixed for any new real estate properties. There are several factors to calculate the charges. The fundamental factor is the demands of the real estate developers. Apart from this, the site of the construction, the location of the property, residential or commercial purposes, etc are also vital factors to consider the infrastructure development charges. In the case of residential properties, extra bedrooms, extra free gross floor area, etc, are also considered.

To identify the IDC, there are a few things to do.

One needs to measure the permissible area of the whole development.
Then the external development charges rate per acre should be divided by the whole permissible area.
At last, the development charges per square foot can be obtained.

What are the benefits of paying infrastructure development charges?

There are several benefits to paying infrastructure development charges.

Infrastructure development charges help in overall national growth by paying towards public properties. Civic amenities like road construction and repair, water supply systems, sewage systems, waste management systems, etc get funds from the infrastructure development charges.
Paying Infrastructure development charges helps in the overall growth of any locality. When a locality includes all kinds of infrastructure and development, investors from different genres find it beneficial for new investments. New investments open up new commercial hubs and businesses. There will be more new job openings in those business entities. So, indirectly, the paid charges help the community’s overall job structure. It leads to the overall development of the urban area, where all developments are done with the infrastructure development charges.
New developments help to build a strong future for the nation. It encourages modern amenities for the public so that the public can enjoy the essentials of those developments.

Strategies to get appropriate infrastructure development charges

The nation should follow an appropriate strategy to manage infrastructure development charges effectively.

Infrastructure development charges must be alienated from the developer’s overall real estate properties. It helps to take the amount from the users of the absolute users of the real estate developments and constructions.
The calculation methods of the infrastructure development charges should have a proper formula to maintain transparency throughout the process.
There must be solid administrative rules to minimize delays or misleading information. A strong rule can easily maintain the permit timeline for the authority, and the charges can be collected easily, too.
By maintaining a solid strategy, the administration can maintain future-ready infrastructure and sustainable economic growth for the nation.

Infrastructure development charges help to create a bridge between inadequate funds and high-end developments. Real estate developers mandatorily provide this fee to the administrative body to obtain permit documents from the municipalities. But in reality, the developers are initially providing an amount towards the growth of their own and national areas.

FAQs

Who is the governing body to collect IDC?

The local municipality collects the infrastructure development charges.

Is it mandatory to pay the IDC?

Yes, the infrastructure development charges are mandatory to pay.

Who needs to pay the infrastructure development charges?

The real estate developer should pay the infrastructure development charges.

How can one calculate the infrastructure development charges?

To calculate the infrastructure development charges, the external development charges rate per acre should be divided by the whole permissible area. The ultimate result is the fee amount.

What are the key factors of infrastructure development charges?

Major key factors are the type of real estate property, areas, site, location, etc.

Which developments come under the IDC fund?

Roadways, water systems, sewage systems, waste management systems, parks, electric poles, bridges, school developments, repairing of public properties, etc come under the infrastructure development charges fund.

Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com

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