2.2 Valuation & Permit Fee Calculations (2021 IBC Section 109)

2.2 Valuation & Permit Fee Calculations (2021 IBC Section 109)

The Role of Valuation in Permitting

In the world of building departments, permit fees are the lifeblood that funds operations, plan reviews, inspections, and administrative functions. The 2021 International Building Code (IBC) Section 109 mandates that a permit shall not be valid until the fees prescribed by law have been paid. Furthermore, an amendment to a permit shall not be released until any additional fee required due to an increase in the estimated cost of the building has been paid.

The core metric used to determine these fees is the project valuation. Valuation is an estimate of the total cost of construction.

Determining and Verifying Project Valuation

According to 2021 IBC Section 109.3, the applicant for a permit must provide an estimated permit value at the time of application. The code specifies that permit valuations shall include the total value of all construction work for which the permit is being issued. This is a comprehensive figure that must encompass:

• Structural elements and framing
• Electrical, gas, mechanical, and plumbing equipment
• Permanent systems (like HVAC units, elevators, and fire sprinklers)
• All materials and labor

Applicants sometimes intentionally or unintentionally underestimate the valuation to save on permit fees. To combat this, the 2021 IBC explicitly gives the building official the authority to reject the applicant's valuation. If, in the opinion of the building official, the valuation is underestimated, the permit shall be denied unless the applicant can show detailed estimates to meet the approval of the building official.

Ultimately, the final building permit valuation shall be set by the building official. Many jurisdictions utilize the ICC's Building Valuation Data (BVD) table, which provides average construction costs per square foot based on the occupancy group and construction type, to verify and standardize valuations.

Calculating Structural Building Permit Fees

Building permit fees are typically calculated using a tiered fee schedule adopted by the local jurisdiction. As the valuation increases, the base fee increases, and the rate for additional valuation increments is applied.

Example Tiered Fee Schedule:

• $1 to $500: Flat fee of $25.00
• $501 to $2,000: $25.00 for the first $500, plus $3.50 for each additional $100 or fraction thereof.
• $2,001 to $25,000: $77.50 for the first $2,000, plus $15.00 for each additional $1,000 or fraction thereof.
• $25,001 to $50,000: $422.50 for the first $25,000, plus $11.00 for each additional $1,000 or fraction thereof.
• $50,001 to $100,000: $697.50 for the first $50,000, plus $7.50 for each additional $1,000 or fraction thereof.

Step-by-Step Math Calculation Scenario: An applicant submits plans for a commercial interior remodel. The building official determines the final valuation to be $62,500.

1. Identify the correct tier: The valuation of $62,500 falls into the "$50,001 to $100,000" tier.
2. Determine the base fee: For the first $50,000, the base fee is $697.50.
3. Calculate the remaining valuation: $62,500 (total) - $50,000 (base amount) = $12,500 remaining.
4. Determine the multiplier units: The schedule charges per "$1,000 or fraction thereof." We calculate $12,500 / $1,000 = 12.5. We round up the fraction, resulting in 13 units.
5. Calculate the additional fee: 13 units * $7.50 = $97.50.
6. Calculate Total Building Permit Fee: $697.50 (base) + $97.50 (additional) = $795.00.

Plan Check (Review) Fees

When construction documents are required to be submitted by 2021 IBC Section 107, a plan review fee must be paid at the time of submitting the documents. This fee covers the cost of plan examiners reviewing the blueprints for code and 2021 IZC compliance before a permit is issued.

Typically, the plan review fee is calculated as a percentage of the building permit fee—most commonly 65 percent. Continuing our example:

• Building Permit Fee = $795.00
• Plan Check Fee = 65% of $795.00 = $516.75. Total upfront cost to the applicant at submittal would be the plan check fee ($516.75). The building permit fee ($795.00) is usually paid at permit issuance.

Specialty Trade Fees

In addition to the structural building permit, commercial and complex residential projects require specialty trade permits for plumbing, mechanical, and electrical work. Jurisdictions generally use two methods to calculate these fees:

1. Valuation-Based: Similar to the building permit, the fee is a percentage or tiered calculation based on the valuation of the specific trade work.
2. Fixture/Equipment-Based: The fee is calculated a la carte based on the number of items installed. For example: $15 base issuance fee + $10 per water closet (toilet) + $15 per water heater. Mechanical might be charged per HVAC unit tonnage, and electrical per circuit or amp service size.

Fee Refunds

Under 2021 IBC Section 109.6, the building official is authorized to establish a refund policy. Usually, the building official may authorize the refunding of any fee paid hereunder which was erroneously paid or collected. They may also authorize the refunding of not more than a certain percentage (often 80%) of the permit fee paid when no work has been done under a permit issued, and not more than 80% of the plan review fee when an application for a permit is withdrawn or canceled before any plan reviewing is done.