THE CONCRETE LEVY will “undoubtedly challenge the viability of construction projects” and add €1,200 to the cost of the most common house types in Ireland.
That’s what the Society of Chartered Surveyors Ireland (SCSI) will tell a Joint Committee on Finance, Public Expenditure and Reform when it meets later today to discuss the proposed Concrete Block Levy.
The levy was announced in the Budget as part of a plan to offset the cost of the mica redress scheme.
It has been limited to concrete blocks and pouring concrete only, and will no longer apply to pre-cast concrete materials.
A 10% levy was initially planned, but this was revised down to 5%.
As a result, it is expected to raise €32 million over 12 months, under half the €80 million it was originally expected to raise.
The introduction date was also pushed out to September of next year, rather than April.
In its opening statement, the SCSI will note that in the year to September, the price of concrete has increased by around 37%.
It will also point to “numerous anecdotal examples of housing projects being paused and in worst case scenarios being cancelled outright”.
The SCSI will argue that “urgent action” is required to address construction cost inflation, currently running at 14% over the past year, and that a concrete levy is “contrary to the need to drive down construction costs”.
The SCSI will also state: “In a period of hyperinflation for the construction industry, the introduction of a levy on concrete will undoubtedly challenge the viability and affordability of construction projects, including new homes.”
While the SCSI notes that there is “limited detail as to how the levy will be applied”, it estimates that the levy would add €1,200 to the cost of a three-bed, block built house.
It describes this as the most common house type in Ireland.
However, Timmy Hennessy from the Department of Finance will contest that the levy would add between €400 to €800 to the cost of this type of house.
The Mica Action Group will also address the Committee and will describe the levy as an “ill-conceived tax” that “should not be implemented in its current form”.
The action group will state that the “concrete levy will be directly passed onto consumers”.
In its opening statement, the group will add: “It (the levy) does not pursue or target manufacturers who are known to be culpable, and instead reinforces a message of no consequences to producers who have obviously breached regulations.
“The concrete levy says to the industry, ‘you can violate regulations. You can wreck and endanger people’s lives. You can be the cause of a multi-billion-euro cost to the taxpayer. But there are no consequences’.”
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