The 10 per cent levy on blocks and other concrete products introduced in the budget will have to be passed on to customers, the owner of a small Dublin construction business has said.
Adrian Spermezan, of Stone Builders, Sandyford, Dublin, mainly does extensions and full house renovations in the Dublin area, with the average job being priced at approximately €200,000.
“It will increase the costs considerably for contracts that I have already signed,” Mr Spermezan told The Irish Times. “We will have to renegotiate prices.”
Most of the jobs he does are negotiated a year in advance and involve the use of significant amounts of concrete in foundations and exterior walls, he said.
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The new levy, which is designed to pay towards the cost of a national redress scheme for people whose homes were built using defective products, is scheduled to come into effect on April 3rd next.
Stone Builders has been in business for about four years, has a small number of employees, and works closely with several sub-contractors, he said.
“As a builder, we get emails every week or two from suppliers telling us that a product will increase in price by 20 per cent, 30 per cent. I got one yesterday. They are increases on increases.”
Initial assessments are that the new Government measure could add approximately €3,000 to €4,000 to the cost of an average semi-detached house in a housing estate, according to Conor O’Connell, director of housing, planning and development with the Construction Industry Federation.
The cost of concrete had already increased by approximately 30 per cent since February 2021.
The levy “is a significant cost increase that is controllable and we are struggling to understand why you would increase the cost of producing all types of homes at this moment in time”.
There is no doubt, he said, but that the cost will be passed on to the consumer.
“It is not really a levy on the construction industry. It is a levy on the first-time buyer. It is a levy on the purchaser of a home. It is a levy on someone who is going to get an extension done on their house.”
The Society of Chartered Surveyors Ireland said the levy will add up to €4,000 to the cost of a new semi-detached house and will “challenge the viability and affordability of new homes”.
Farmers were also unhappy with the proposed new levy, with the President of the Irish Cattle and Sheep Farmers Association, Dermot Kelleher, saying he was “stunned” by the announcement.
“It will have huge implications for any farmer building a slatted tank, slurry or silage storage or grain storage facilities,” he said.
