The Government will be imposing "crucifying" stealth taxes on house-buyers next year through the introduction of a levy on new homes, Fine Gael claimed in the Dáil yesterday.
Party leader Mr Enda Kenny said that those buying newly-built houses could be forced to pay up to €600 million in "direct stealth taxes" through the levy.
The "development charge" is due to come into effect from March next year and could range from €6,000 to €28,000 depending on the county and the size of the house, said Mr Kenny. He said if an average of €10,000 was charged for each of the 60,000 houses being built in a year, "that is a direct stealth tax" of €600 million.
However, amid persistent heckling and interruption, the Taoiseach, Mr Ahern, insisted that such levies had been in place since 1964, but were limited for years to roads and sewerage schemes and were applied inconsistently. Charges would now be applied in a consistent way to provide recreational and community facilities for new developments. Mr Ahern also said the final decision on the levy amount "is a matter for the elected representatives in the local councils".
Fine Gael said "the only decentralisation we will have from this Government is decentralisation of the tax burden", but Mr Ahern said the measure was "an advance in social thinking and should be welcomed".
He rejected reports that the charge was being imposed to pay for the cost of benchmarking pay awards to public service workers. The charge was "ring-fenced to pay for facilities servicing new developments. It cannot be used to pay for any other issue such as benchmarking or other local authority services".
Mr Kenny raised the issue during Leaders' Question Time and demanded to know how the Taoiseach could "stand over this. How does it measure up to your own statements about wanting more houses in rural Ireland and wanting everyone to own their own home?"
Under the Taoiseach's stewardship house prices had doubled in the past two years and "you are now directly imposing serious, crucifying stealth charges on new house-buyers and on young couples in particular".
Mr Ahern said, however, that more than 60,000 houses were being built this year, the highest number of houses per 1,000 people "of any country in Europe and it is an extraordinary achievement for the Government to be dealing with this".
He said the charges paid for local authority infrastructure needed for new developments. There was, however, "widespread inconsistency" in their application, since their original introduction in 1964.
As a result, the then minister for environment, Mr Noel Dempsey, brought in the Planning and Development Act in 2000. This included provisions "requiring local authorities to prepare schemes setting out how development contributions would apply in their area".
This was to ensure that new developments "would not be built without proper facilities, which was the problem in the past. Estates were built all over the country, and west Dublin in particular, which had no proper facilities."
