Who Pays Tap and Impact Fees: Builder, Buyer or Seller?
The utility bills whoever applies for the permit or the water service, and on new construction that is almost always the builder. The builder then folds the charge into the price of the house. If you buy a vacant lot and build yourself, you are the applicant and you pay it directly. In Charlotte, a builder finishing a house on a subdivision lot where the developer already laid the pipes pays $1,453 water and $5,066 sewer system development fees plus a $208 meter charge (FY27, 5/8-inch meter), or $6,727, before Charlotte Water will set the meter.
What matters to a buyer or lot seller is when the bill is triggered, whether anything was already paid, and whether the fee can be spread out. Each utility sets those rules; below are real ones. For what the fees are, see tap fee vs. impact fee.
Who the utility actually bills
The fee is owed by whoever requests the building permit, the service license or the meter, and it is collected before that party gets what it asked for. Three common setups:
- Production builder in a new subdivision. The developer usually builds the mains and stubs, and the home builder pays the per-lot capacity charges and meter fees as each house goes up. Charlotte Water drops its connection fee on developer-installed services and charges the meter fee instead, which is why the Charlotte per-lot figure above is $6,727 and not the $17,370 a custom home pays when the utility installs both services.
- Custom build on a lot you own. You, or your builder acting as your agent, apply for the permit. The fee shows up on your permit invoice or your service application, and you pay it out of pocket or out of the construction loan draw.
- Buying a finished new home. The fees were paid months earlier by the builder. You pay them only through the purchase price, and a fee the builder already paid is normally not itemized for you. See what utility fees show up at closing for charges that can still reach you.
When the fee is due
Timing decides who holds the bill. A fee collected at plat recording lands on the developer; one collected at building permit lands on the builder or owner-builder; one collected at meter set can land on whoever owns the lot when the house is nearly done. The published rules differ widely:
Payment trigger in each utility’s own rules or fee schedule. Checked 2026-09-24.
| Utility | Fee | When it is collected | Source |
|---|---|---|---|
| Salt Lake City Public Utilities | Water connection fee | Before the city issues the building permit | City Code 17.16.040 |
| Pima County RWRD (Tucson) | Sewer connection fee | Paid to the county before the city releases the building permit | Pima County Code 13.20.600 |
| Orange County Utilities, FL | Water and wastewater capital charges | Immediately before the building permit for vertical construction | County Code ch. 37, Art. I |
| Sacramento Dept. of Utilities | Water and sewer development fees | Added to the building permit invoice | Residential fee schedule |
| Seattle Public Utilities | Water and wastewater SDCs | When the water service or side sewer permit invoice is paid | Director’s Rule FIN-219 |
| Charlotte Water | System development fees | Paid with a payment form before a meter set can be requested | SDF payment form |
| Denver Water | System development charge | Rate set by the date a complete application is submitted and paid | SDCs for 2026 |
| Fort Worth Water | Water and wastewater impact fees | Apply to plats recorded on or after 4/1/2017; the rate follows the building permit date | Current impact fees |
So a lot seller rarely pays these fees unless the seller is also the builder, and the date you apply can move the price. Fort Worth’s 5/8-inch impact fees are $2,824 water and $2,680 wastewater for permits issued through 9/30/2026 and $2,990 and $2,838 from 10/1/2026. Pulling the permit before October 1 saves $166 + $158 = $324. Colorado Springs Utilities adds a clock: once you pay its development charges, you must get the building permit within 120 days or re-apply at current rates, according to its 2025 development charges sheet. For how plat dates pick the fee table in Austin, San Antonio and McKinney, see our fee terms guide.
How the fee shows up in a new-home price
A builder treats these fees like lumber: a per-house cost that goes into the price, rarely broken out on the contract. The public schedules show what is embedded:
- Charlotte, FY27: $6,727 on a developer-served subdivision lot with a 5/8-inch meter; $17,370 when Charlotte Water installs both services.
- Charleston Water System, 2026: $4,620 water impact fee for a 3/4-inch meter and $6,670 per ERU sewer, or $11,290. The same two fees become $5,115 and $8,160 on 1/1/2027, or $13,275, a $1,985 increase.
- Las Vegas Valley Water District, from 3/1/2026: the SNWA regional connection charge is $7,998 for a 5/8-inch home, and it rises every March 1.
If your home is not yet started, check the contract for an escalation clause that passes government fee increases through to you; without one, the builder carries that risk. Why tap fees are going up shows how often those increases arrive.
Buying a vacant lot
With a lot, the fees are ahead of you, and the listing price rarely says so. The questions that change the number:
- Is there already a service or a paid fee? Many utilities credit a fee paid for the parcel before. Salt Lake City does not charge a new water connection fee when a demolished home’s service is reused within five years. Colorado Springs Utilities may give credit where connection fees were paid in full when a building permit was issued. Ask the seller for receipts, and ask the utility to look up the parcel. Our guide on tap fee credits for teardowns covers these rules.
- Were the mains built by a developer? In a platted subdivision with stubbed services, you typically pay capacity charges and a meter fee. On a lot with no main in front, you may owe a main extension on top, which can dwarf the fees; see utility extension cost.
- When was the plat recorded? In Texas cities that key impact fees to the plat date, an older plat can mean a lower fee table.
- Is anything owed on the parcel? In Nashville, tap and capacity fees are a lien that runs with the property under Metro Code 15.20.060 and 15.36.080. Portland secures deferred SDCs with a lien that stays until paid. A title search should show these.
- Which utility serves the address? Split service areas are common. Orlando water in city limits is OUC, sewer is the city, and unincorporated addresses fall under Orange County Utilities, each with its own schedule.
- Is a new fee pending? Salt Lake City has proposed raising its water, sewer and stormwater impact fees (for a 3/4-inch home, water from $1,871 to $5,577), effective 90 days after council approval if adopted. A lot bought today may be built under the new schedule.
Run the lot through the utility connection cost calculator and the cost to bring utilities to land guide before you make an offer, not after.
Can you finance the fees?
There are two routes: your lender and the utility.
Through a loan. On a custom build, fees paid at permit are part of the construction budget like any other hard cost, so they can be covered by the construction loan if the lender accepts that budget. On a finished new home, they are already inside the price and therefore the mortgage. Ask the lender in writing before you close on the lot.
Through the utility. A few utilities publish their own payment plans or deferrals. These are real, current programs, each with conditions:
Official payment plans and deferrals for connection charges. Checked 2026-09-24.
| Utility | Program | Key terms |
|---|---|---|
| Seattle Public Utilities | SDC installment contract | At least 25% down; balance plus interest due within 24 months or at sale or transfer of the property, whichever is earlier |
| Seattle Public Utilities | SDC deferral finance contract | For economically disadvantaged homeowners who own and live in a home zoned Neighborhood Residential |
| City of Portland | SDC deferral | Deferral period depends on project value; interest at the city’s interim rate; $50 non-refundable finance fee; lien on the property |
| City of Portland | SDC installment loan | Monthly or twice-yearly payments over 5, 10 or 20 years; signed by the owner of record; lien until paid |
| Denver Water | Stub-in permit (Operating Rules 2.07.5) | SDC deferred until the stub-in is converted to a standard license, then paid at the rate in effect at conversion |
Seattle’s 24-month clause is the one a buyer should notice. If a seller built under an installment contract and has not finished paying, the balance comes due when the property sells, and it has to be settled at closing. Portland’s lien works the same way in practice. Nashville’s code allows 36 monthly installments without interest for connections up to 1.5 inches, but it does not apply to single-family residential developments (Metro Code 15.20.050 and 15.36.070).
Waivers exist too, but they are narrow. Portland may exempt newly created housing units permitted from August 15, 2025 through September 30, 2028 from SDCs under certain conditions; Charleston Water System waives its $500 engineering charge for qualified affordable housing; Denver Water offers a 20% SDC credit for certain developments whose conservation measures cut water use by at least 20%.
A short checklist by role
- Buyer of a new home: check for a fee-escalation clause and for any deferral or installment balance that survives the sale.
- Buyer of a lot: get the parcel’s service and fee history from the utility, the plat date, the provider for each utility, and any pending fee change, then price the lot net of those fees.
- Seller of a teardown lot: document any existing-service credit and its deadline; it has value to a buyer.
Related: new construction utility costs, water tap fee, sewer tap fee, tap fees by city, and city pages for Charlotte, Fort Worth, Seattle, Portland and Salt Lake City.
Frequently asked questions
Does the buyer or the builder pay the tap fee on a new house?
The builder pays the utility, because the builder applies for the permit and the meter. The buyer pays it indirectly through the price. In Charlotte that embedded cost is $6,727 per subdivision lot in FY27 for a 5/8-inch meter.
Are tap fees negotiable?
Not with the utility; the amounts are set by ordinance or tariff. You can negotiate the home or lot price, a seller credit, or who absorbs a scheduled increase, such as Charleston Water System’s rise from $11,290 to $13,275 for water and sewer impact fees on 1/1/2027.
Can impact fees be rolled into a mortgage?
On a finished new home they already are, because they are part of the price. On a custom build they are a construction cost the lender may fund in the construction loan; confirm with the lender. Some utilities finance them directly, such as Portland’s 5-, 10- or 20-year SDC installment loans.
Does the seller of a vacant lot pay impact fees?
Usually not. The fee is triggered when someone applies to build or to connect, which is normally the buyer. A seller who paid fees earlier, or whose old house had a service, may have a credit that transfers with the land.
When are water and sewer impact fees paid?
It depends on the utility: before the building permit in Salt Lake City and Pima County, on the building permit invoice in Sacramento, with the service permit in Seattle, and before the meter set in Charlotte. In Fort Worth the plat date decides whether impact fees apply and the permit date sets the rate.
What happens to a payment plan when the house is sold?
Under Seattle’s installment contract the unpaid balance is due within 24 months or at sale or transfer, whichever is earlier. Portland secures deferrals and loans with a lien that stays on the property until the SDCs are paid in full.