What is External Development Charges (EDC)?

External Development Charges are paid by the developer to the municipal authorities to maintain civic amenities that are located within the project’s boundary. In accordance with RERA, development work of this sort includes constructing roads, supplying water and electricity, landscaping, maintaining drainage and sewage systems, managing waste, and any other work that will benefit the project in its entirety. Despite the fact that the city’s civic authorities decide the charges, the brunt of them ultimately falls on the buyer. So, EDC tends to raise the cost of the project for homebuyers by almost 15-20 percent.

How to calculate EDC for your project?

Per square foot EDC would be equal to the applicable EDC rate divided by the total permissible area. The Department of Town and Country Planning (DTCP) has fixed a formula to permit uniformity in the calculation of EDCs, but as a buyer, you should keep on top of current FARs and EDCs in your area.

It can be assumed that if, for instance, the FAR of an area is three, and the total area of the plot is 1,000 square feet, the maximum size of the building could be developed on such an area would be 3,000 square feet. The EDC rate per sq ft would now be calculated by dividing the applicable EDC rate per acre by the total permissible area.

How Much Does the Homebuyer Pay EDC?

As opposed to IDC, EDC differs according to apartment size. The homebuyer, however, needs to contribute 10 percent of the apartment’s base price to EDC. In the case of a developer, EDC is calculated at the time of granting permission to develop land and buildings.

In Summary

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