Quick Takeaways

  • Private Transfer Fees are charges required to be paid to developers, HOAs or individuals at closing each time a property is sold.
  • Development Impact fees are required to be paid by developers as a precondition to the approval of their projects.
  • These fees impact housing price, affordability, and availability in cities, towns, and regions that are undergoing development.

Private transfer fees, also known as reconveyance fees, recovery fees, capital recovery fees, or resale fees, is a charge that is required to be paid to a developer, HOA, or individual at closing each time a property is sold. The transfer fee is attached to the property as a covenant and usually runs for a set period, often 20 or 99 years. While developers say it is a way to spread improvement costs over a longer period, opponents believe private transfer fees decrease affordability, increase potential liability, and provide no benefit to property purchasers of the community in which the property is located. In 2012, the Federal Housing Finance Agency (FHFA) issued a rule prohibiting the fees on mortgages handled by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. As of 2021, 43 states explicitly prohibit private transfer fees in most situations.

Private transfer fees are different from impact fees, or development fees, which are expenditures that developers are required to make as a precondition to approval of their projects. Impact fees are generally used to finance roads, schools, affordable housing, transit systems, and other projects and services in municipalities throughout the United States. The fees are frequently passed on by developers to purchasers in the price of a new property and, therefore, increase the cost of housing and decrease the profitability of a particular project.

See References for more information.


We've already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.

State Issue Tracker

REALTORS® can keep up with the latest state legislative activity surrounding private transfer and impact fees by accessing NAR's State Issue Tracker. This online database is available free to members and tracks legislative and regulatory actions at the state level on several issue of importance to REALTORS® and the real estate industry.

FHFA's Ban on Private Transfer Fees

Private Transfer Fees: A Rule by the Federal Housing Finance Agency (Federal Register, Mar. 16, 2012)

Full publication of the Federal Housing Finance Agency’s final rule on Private Transfer Fees. Includes a history of the rule, discussion and comments from the public, other regulatory agencies, and the FHFA; and supplementary information about the rule.

FHFA Publishes Final Rule on Private Transfer Fees (Federal Housing Finance Agency, Mar. 15, 2012)

“The final rule limits Fannie Mae, Freddie Mac and the Federal Home Loan Banks from dealing in mortgages on properties encumbered by certain types of private transfer fee covenants and in certain related securities…The final rule excludes private transfer fees paid to homeowner associations, condominiums, cooperatives, and certain tax-exempt organizations that use private transfer fee proceeds to benefit the property. Fees that do not directly benefit the property are subject to the rule, and would disqualify mortgages on the property from being sold to Fannie Mae or Freddie Mac, or used as collateral for Federal Home Loan Bank advances. With limited exceptions, the rule applies only prospectively to private transfer fee covenants created on or after the date of publication of the proposed rule, Feb. 8, 2011.”

Impact Fe​e Basics

State Impact Fee Enabling Acts (Duncan Associates, Jan. 3, 2015)

“Impact fees were pioneered by local governments in the absence of explicit state enabling legislation. Consequently, such fees were originally defended as an exercise of local government's broad "police power" to protect the health, safety and welfare of the community. The courts gradually developed guidelines for constitutionally valid impact fees, based on a "rational nexus" that must exist between the regulatory fee or exaction and the activity that is being regulated…To date, 29 states have adopted impact fee enabling legislation (for other than water and wastewater fees). These acts have tended to embody the constitutional standards that have been developed by the courts.”

This is a summary of those impact fee enabling acts, the standards for impact fees, the facilities eligible for impact fees, state planning requirements, substantive provisions and procedural provisions. It includes each state act at the end of the report.

Development Impact Fees: A Primer (Duncan Associates)

A primer that includes a definition of development impact fees, then discusses the policy considerations and legal considerations when implementing these fees, and cites examples of state legislation regarding development impact fees.

The Impacts of Impact Fees

One Reason Housing is so Expensive in California? Cities, Counties Charge Developers High Fees (LA Times, Aug. 6, 2019)

“A long-awaited study detailing how much cities and counties charge developers to build housing in California found that such costs are often hidden, vary widely across the state and have slowed growth…The report, released by the state Department of Housing and Community Development, comes as Gov. Gavin Newsom and state lawmakers continue to search for ways to lower construction costs to help remedy a shortage of available homes. The study recommends that legislators push cities and counties to make public their fees, set standards for services so that costs will be more predictable and take into account how they affect housing production.

How ‘Developer’ Became Such a Dirty Word (The New York Times, Jul. 29, 2019)

A discussion of the history of development and the impacts that development has on housing growth, shortages, and affordability.

Impact Fees in Realtion to Housing Prices and Affordable Housing Supply (University of Oklahoma, 2016)

“This Chapter is designed to provide a summary of the various theoretical and empirical investigations of the effects of impact fees over the past two decades. It is designed to synthesize the existing evidence concerning three critical market conditions: 1) residential property values, 2) residential construction rates, and 3) non-residential economic development and job growth. The Chapter concludes with a brief summary and some comments on how these findings contribute to the public debate over the use of impact fees.”

Impact Fees and Employment Growth (Economic Development Quarterly, Nov. 2015) E

“The research presented in this study, based on data from Florida counties, finds that the relationship between fees on commercial development and fees on employment differs across different categories of economic activity. The use of fees is positively related to service-sector employment growth and negatively related to manufacturing employment growth. This result suggests that different sectors realize different levels of benefits from infrastructure provided through fee revenue and that policy decisions based on total employment may suffer from over aggregations and lead to unintended consequences.”

Research Rep​orts

2019 National Impact Fee Survey (Austin, TX: Duncan Associates, 2019)

This report summarizes the results of a detailed survey of impact fees that individual jurisdictions across the country are charging. The results of the survey reveal where impact fees are most common, how much jurisdictions in various states are charging, and the types of facilities for which fees are being charged.

Location-Based Development Impact Fee Programs and New Business Location Decisions (Lincoln Institute of Land Policy, 2019)

This research “explores the effects of development impact fees on business location decisions. While research investigating the causes and consequences of impact fee programs spans four decades, surprisingly little is known about how commercial and residential impact fee programs influence the spatial distribution of new businesses. The results highlight the value of public infrastructure to the business community as well as the potential for efficiency gains from regionally coordinated impact fee programs”

Impact Fee Handbook (National Association of Home Builders, 2016)

This Handbook was developed to provide homebuilders and other parties interested in impact fees a resource for exploring critical issues and to provide strategies for achieving balanced infrastructure financing solutions.

Private Transfer Fees: Proven to Fail? A White Paper Update (National Association of REALTORS®, August 2015)

“Since the original publication of this White Paper [see White Paper below], new rules have been implemented to limit the effect of PTFs—or to ban them entirely. Despite these changes, questions about the legal enforceability of PTFs are almost certain to arise from purchasers, and agents and brokers should be prepared.”

White Paper Report: Private Transfer Fees—Potential For Trouble, Problems for the Future? (National Association of REALTORS®, May 2008) — Member login required

“Private transfer fees (PTFs), also sometimes referred to as private transfer taxes, are one of the hotly debated new issues in real estate law and practice. There seems to be little middle ground when it comes to opinions about PTFs—people either love them or hate them. But just what are PTFs? How do they work, and how do they affect day- to-day real estate transactions? What is their potential impact on the future of real estate law and practice? The following discussion, based on interviews with real estate experts and research to locate the most current laws and periodical discussions, will attempt to answer these questions and more, as well as raise a few new questions that it may be far too early to answer.”

White Paper Report: Private Transfer Fees—Potential For Trouble, Problems for the Future? (National Association of REALTORS®, May 2008)

Member login required

Impact Fees & Housing Affordability: A Guide for Practitioners (U.S. Department of Housing and Urban Development, June 2008)

This Guidebook includes information that is useful to local jurisdictions that are either in the process of implementing impact fees, or considering revisions to current impact fee programs. It includes information on history, alternative financing models, state legislation, impact fee design, and case studies

Policy Guide on Impact Fees (American Planning Association, 1997)

Policy guide from the APA in which eight policies and several standards are discussed

eBooks & Ot​her Resources


Buy, Rent, and Sell: How to Profit by Investing in Residential Real Estate (eBook)

The Complete Guide to Zoning: How Real Estate Owners and Developers Can Create and Preserve Property Value  (eBook)

A Guide to Impact Fees and Housing Affordability (Audiobook, eBook)

Sustainable Residential Development: Planning and Design for Green Neighborhoods (eBook)

Books, Videos, Research Reports & More

The resources below are available for loan through Member Support. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Member Support at 800-874-6500 for assistance.

ImpactFees — Visit this site for state and local information, case law, publications, surveys, FAQs, and the latest news related to impact fees and infrastructure financing

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