The Government has revised upwards figures around the potential impact that the controversial concrete levy would have on new builds, it has emerged.
The Department of Finance previously said that an analysis showed that the impact of the levy on construction costs would be between €800 to €1,600 for a typical three-bed semi-detached house or €750 to €1,100 for a six-floor apartment block with basement.
However, the department has now said that when “soft costs” are included, such as the cost of finance, fees, risk and contingency, the impact on range for a typical dwelling is between €1,400 to €2,200 and for a typical apartment is between €1,300 to €2,100.
[ New group of Fianna Fáil TDs to propose changes to controversial concrete levyOpens in new window ]
There has been ongoing disagreement about the impact that the planned 10 per cent levy would have on new builds, with the Society of Chartered Surveyors Ireland estimating that the levy will add approximately €3,000 to €4,000 to the overall delivery costs of an average three-bed semi-detached home.
It comes as Fianna Fáil TDs are set to push for an exemption for first-time builds, among other exemptions.
A group of party TDs are set to meet with the Minister for Housing Darragh O’Brien next Tuesday to outline their concerns about the levy, which is due to be discussed in the Dáil as part of the forthcoming Finance Bill on October 20th.
A number of TDs have said privately that they will be pushing for exemptions, such as for first-time builds, as new information reveals that the levy will apply to 18 different concrete products that are used in everything from walls to floors and stairs.
There is growing unrest among backbench TDs on the issue, with fears that it will exacerbate the housing crisis by further pushing up building costs.
There is also a push from within Fine Gael to delay its introduction, with the levy due to kick in from April 3rd, 2023.
The decision to introduce it first came in a Government decision taken in November 2021. It was designed to contribute towards offsetting the cost to the exchequer of repairing homes affected by defective blocks.
Sinn Féin has called for a widening of the plan to include banks and other businesses but the Government has claimed this would lead to higher bank charges and interest rates.
Taoiseach Micheál Martin suggested last weekend that the Government would be open to amending the controversial plans to ensure they do not penalise homebuyers by forcing up new build house prices.
He said that the details would be dealt with in the Bill but a revenue stream was needed to deal with mica costs.
“The Finance Bill will deal with this issue in terms of fleshing out the proposals. And I’ve made the point already that the expenditure around the pyrite issue, the mica issue and the apartment defects issue, is a very significant expenditure.”
He said the revenue stream provided by the levy would not match the expenditure in its entirety, but it would “show people that where there’s massive expenditure going on there has to be some revenue stream. But the details of this will be worked out in the Finance Bill.”
Tánaiste Leo Varadkar said he did not see how it would be possible to exempt first-time buyers.
“I just don’t know how you would do that. The levy falls on a concrete block and I don’t see how you would be able to exempt any particular group.”
“If you did do that, other groups would make a very good case for being exempt too.”
“Take, for example, a family living in a very overcrowded apartment who are finally able to upgrade and buy a house for the first time. Would they then have to bear a higher cost? That’s always a difficulty when you try to exempt one group – you then put a bigger burden on another group.”
