Every house needs some way to deal with the waste water it generates from flushing the toilet, from showers, washing machines, and so on.
Images from The EPA Code of Practice: Wastewater Treatment and Disposal Systems Serving Single Houses (p.e.≤10) If you cannot connect to the mains wastewater network, then you will need an onsite waste water system and a percolation area for effluent disposal to ground. Even if you have a compost toilet (dry toilet system that does not require flushing) you still need a way to deal with greywater (dirty water from showers, machines, etc.). The word percolation is derived from Latin, Per Colare, literally to strain forward or through. For the purposes of effluent treatment and disposal, a percolation area allows effluent to pass through the permeable subsoil beneath the percolation trench, being filtered, or strained as it does so. A percolation test measures the rate at which water infiltrates down into the soil, and thus how suitable the soil will be in the longer term for effluent filtration and disposal.
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