A new levy on concrete blocks will add up to €1,600 towards the building costs of a three-bed semi-detached house, the Department of Finance has confirmed.
Earlier this week the Minister for Housing Darragh O’Brien said the Department of Finance estimated the controversial levy will mean a 0.4 per cent increase in the cost of concrete products being used to build homes. However, the Department of Finance has now said that the increases in construction costs could be up to 0.9 per cent, or €1,600 on a three-bed home.
“The levy has been carefully designed so as to balance the need to ensure some of the costs of the redress scheme are met while limiting the impact on inflation in the construction sector,” the department said.
“Analysis carried out on the levy estimates that for a typical dwelling increases in construction costs will be in the range of approximately 0.4 per cent – 0.9 per cent. To put this in context estimates available to the department indicate that the levy would add between €800 to €1,600 to the construction costs associated with a typical three-bed semi-detached house.”
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Opposition parties have again called on the Government to scrap the plans for the levy, which was announced on Tuesday as part of Budget 2023 following signals from the Coalition last year that it was considering such a move in light of costs associated with repairing homes affected by defective blocks.
Senior sources across the Coalition indicated Thursday night, however, that there are no plans to reverse or pause the announcement and they believe it will be introduced as planned next April. There have been suggestions that changes could be made as part of the forthcoming legislation to give effect to the levy, but the Dáil has heard more calls for it to be scrapped entirely.
Tánaiste Leo Varadkar defended the 10 per cent levy, and said that the cost of defective housing “should fall at least in part” on the construction sector.
Mr Varadkar said “it’s going to cost hundreds of millions if not billions of euros” to repair mica housing defects for some 8,000 families. He said they also needed to do something to assist apartment owners also impacted by defective construction. They had to find a way to recoup some of the cost and it was not fair that taxpayers should pay all of it.
He was responding in the Dáil to Social Democrats housing spokesman Cian O’Callaghan, who called for the Government to abandon “this unfair levy”.
People Before Profit TD Paul Murphy said he believed an immediate solution to deal with financing redress schemes, including the costs of defective apartments, was a general levy on the wider industry from the profits declared.
Meanwhile, Minister for Finance Paschal Donohoe said the levy was unlikely to be reversed despite the protestations of Fine Gael and Fianna Fáil backbenchers. He said he was “aware of the different feedback in relation to it, which, of course, you’ll always consider – but the key point behind the levy still does stand”.
Taoiseach Micheál Martin has also said that the controversial 10 per cent levy will not be abandoned, noting the decision had been made by Government last November against the backdrop of “an enormous outlay” by taxpayers to help people affected by building defects.
