New Construction Impact Fees in Lebanon, TN: Who Pays?
Who pays impact fees and the adequate facilities tax on a new home in Lebanon, TN?
In almost every case the builder or developer pays impact fees in Lebanon, because the fees are collected at building permit application and only a property owner of record or a licensed contractor can pull the permit. That does not mean you avoid the cost. It is built into your purchase price. On a typical 2,500 square foot home in Lebanon, city fees run roughly $4,000 and Wilson County adds a flat $5,000 Adequate Facilities Tax, for about $9,000 total. Tennessee law also entitles you, on the first sale of a new dwelling, to a written statement of exactly what was paid.
By Khristian Schlemmer | September 15, 2026
Buyers ask me some version of this question every week, and it usually comes out sideways. It sounds like "what is this $5,000 line I keep hearing about," or "my builder said the lot premium covers fees, is that true," or "my neighbor built two years ago and paid less than I am being quoted."
Here is the short answer. New construction in Wilson County carries a stack of one time government charges that resale homes do not. You almost never write the check yourself. You pay it anyway, inside the price.
Knowing what the stack actually is gives you something useful: a way to compare two builders honestly, and a way to read a quoted price without guessing.
Impact fees in Lebanon: what gets charged on a new home permit
There are two layers, city and county, and they are separate.
The county layer is the Adequate Facilities Tax, or AFT. Wilson County charges a flat $5,000 per residential unit, collected when the building permit application is filed. Flat means flat. A 1,600 square foot starter home and a 4,200 square foot home on five acres pay the same $5,000. The money is split evenly between the city and the county and goes toward school construction debt service.
Per Wilson County's Building Codes Division, permit fees and the AFT are collected in full at the time of application, and the AFT has to be paid by separate check. If you are building in unincorporated Wilson County rather than inside a city, the county's own residential permit fee runs $0.70 per square foot, and that calculation includes basement square footage whether the basement is finished or not.
The city layer depends on which city you are building in. According to the Tennessee Impact Fees and Development Tax Resource Center, Lebanon assesses an impact fee of $1,500 per lot, a stormwater fee of $500 per lot, and a building permit calculated at $0.80 per square foot. On a 2,500 square foot home that comes to roughly $4,000 in city fees. Add the county's $5,000 and the total lands around $9,000.
Mt. Juliet is structured differently. The same source lists a Road and Park Impact Fee at $0.50 per square foot, a $500 per lot stormwater fee, and a building permit at $0.40 per square foot, which works out to roughly $3,000 in city fees on a 2,800 square foot home, or about $8,000 once the AFT is added.
Two things to hold onto. First, Mt. Juliet's fee structure scales with house size while Lebanon's impact fee does not, so the gap between the two cities narrows or widens depending on what you are building. Second, fee schedules get adjusted, often annually. Verify the current numbers with the City of Lebanon Building Codes Department or the Wilson County Building Codes Division before you rely on them.
Why this shows up in your price even though you never pay it
The permit is pulled before your home exists. In a production or spec build, the builder or developer has already paid the AFT, the impact fee, the stormwater fee, and the permit fee long before you sign anything. Those dollars are sitting in the builder's cost basis, and the base price reflects them.
That is why "who pays" is the wrong question and "where is it" is the right one.
On a build to suit or a true custom build where you own the lot, the answer can flip. If you are the property owner of record pulling the permit, you are writing the checks directly, and you want those numbers in your construction budget from day one rather than discovering them at permit time. This is one of the places where understanding how much cash a Tennessee purchase actually requires matters more than the down payment percentage everyone focuses on.
The disclosure most buyers never ask for
Tennessee Code Annotated 66-5-211 is short and almost nobody invokes it.
On the first sale of a dwelling, the owner of the residential property has to furnish the purchaser a statement disclosing the amount of any impact fees or adequate facilities taxes paid to any city or county on that parcel. The statute defines the terms too, covering both impact fees and any development or privilege tax imposed on the act of development.
So on a brand new home, you can ask for the number in writing and you are entitled to it.
Why bother? Three reasons:
It tells you what the parcel actually carried, which is a real input if you are comparing a Lebanon lot to a Mt. Juliet lot or an unincorporated county lot.
It surfaces whether the builder treated fees as a pass through line or absorbed them into base price, which tells you something about how the rest of the pricing is constructed.
It is a clean, low friction question that a straightforward builder answers immediately. How a builder handles it is information.
Ask for it during your review period, not at the closing table. The same discipline applies to the rest of the paperwork, which is why I walk buyers through what is different about new construction contracts in Middle Tennessee before they sign builder paper.
Where the fee conversation is heading in Wilson County
This matters because the rate has been under pressure for years.
Wilson County collects roughly $16.9 million a year in AFT revenue. Against that, the county carries more than $400 million in school construction debt, including the borrowing behind Green Hill High School in Mt. Juliet, Lebanon High School, Watertown High School, and Gladeville Middle School. County leadership has said repeatedly that a flat $5,000 does not keep pace.
In 2024, House Bill 2426 would have authorized Wilson and four other fast growing counties to raise their adequate facilities taxes by up to 50 percent, taking Wilson's rate from $5,000 to $7,500 per unit, with the ability to adjust every four years after that. The bill stalled in committee amid opposition from the Tennessee Realtors Association, as reported by the Tennessee Lookout. It did not pass, but the underlying pressure did not go away.
Separately, on November 19, 2025, the Wilson County Commission voted to raise minimum lot sizes in agriculturally zoned unincorporated areas from 40,000 square feet to 80,000 square feet, roughly doubling the floor to just under two acres. County Mayor Randall Hutto noted at the time that 69 percent of the county remains open space. Suburban residential minimums with public sewer also moved up.
None of that changes what you pay this month. All of it changes what the pipeline looks like in two years, which is exactly the horizon a new construction buyer should be thinking about.
What this means in a 2026 Lebanon market
Context matters here. Lebanon was ranked the 12th fastest growing city in the United States in 2024, and the Barton Village master planned community off South Hartmann Drive near I-40 is adding close to 2,000 homes on 350 acres, including a Del Webb active adult section.
At the same time, the market has loosened. Redfin data shows Lebanon homes selling at an average of $390,000 recently, down 3.5 percent year over year, with homes taking a median of about 70 days to sell compared with 78 days a year earlier.
That combination, a heavy new construction pipeline plus longer market times, is exactly the environment where builders get flexible. Fees are not usually the thing they move on, because those dollars are already spent. What they will move on is incentives, upgrades, closing cost contributions, and rate assistance. Knowing the fee stack is fixed helps you stop negotiating the immovable thing and start negotiating the movable one.
One caution. When a builder ties incentives to their preferred lender, run the comparison on total cost rather than headline rate. I broke that math down in this look at builder preferred lenders in Tennessee.
Frequently Asked Questions
Does the adequate facilities tax get added to my closing costs?
Generally no. On a builder owned spec or production home, the AFT was paid at permit application months earlier and is inside the purchase price, not on your settlement statement. If you own the lot and are pulling the permit yourself, you pay it directly at the county, in full, at the time of application.
Is the Wilson County AFT the same in Lebanon, Mt. Juliet, and unincorporated areas?
The $5,000 county AFT applies countywide per residential unit. What changes is the city layer stacked on top of it. Lebanon and Mt. Juliet charge different impact, stormwater, and permit fees, and a home built in unincorporated Wilson County pays the county permit fee of $0.70 per square foot instead of a city schedule.
Can I ask the builder what they paid in fees?
Yes, and on a first sale you are entitled to a written statement of impact fees and adequate facilities taxes paid under T.C.A. 66-5-211. Ask during your review period and get it in writing.
Do impact fees apply to resale homes?
No. These are one time charges tied to new development and collected at permit issuance. If you buy an existing home, the fees were paid by whoever built it. Your ongoing obligation is property tax, which is a separate system entirely.
Will the $5,000 rate go up?
It has not, as of this writing. The 2024 attempt through House Bill 2426 to authorize a 50 percent increase stalled in committee. Given the county's school debt load and growth rate, another attempt is a reasonable expectation, but nothing is in effect today. Confirm current rates with Wilson County before budgeting.
The bottom line
The fees on a new Lebanon home are real, they are roughly $9,000 on a typical build, and you are paying them whether or not your name is on the check. Treat them as a known, fixed part of the cost, get the disclosure in writing, and spend your negotiating energy on the parts of the deal that actually move.
If you are comparing new construction across Lebanon, Mt. Juliet, and unincorporated Wilson County, or trying to figure out whether a builder's quoted price is competitive, that is a conversation worth having before you pick a lot. Reach out anytime and I will walk you through the numbers on the specific communities you are looking at.
About Khristian Schlemmer
Khristian is a top-producing Middle Tennessee Realtor and founder of First Class Real Estate, serving buyers, sellers, and investors throughout the Greater Nashville area. With over $75 million in career sales and 300+ homes sold, he is known for creative marketing, strong negotiation, and delivering a true first-class client experience. Born into a family passionate about real estate investing and home building, Khristian combines local market expertise with modern marketing strategies to help clients confidently achieve their real estate goals.
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