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'A major shock': Cost of building new homes to go up by as much as €3k due to concrete levy

TDs expressed concern over the concrete block levy at their respective party meetings this evening.

Image: Shutterstock

Updated Sep 28th 2022, 10:21 PM

A NEW 10% levy on concrete introduced in the Budget to help pay the redress for the mica scandal will mean it will mean an extra cost of at least €3,00 to build a typical home in Ireland, it was warned today.

The Society of Chartered Surveyors said that the levy will add €3,00o-€4,000 to the overall delivery cost of an average three-bed-semi. 

Yesterday, it was announced that the 10% levy is to be introduced on concrete blocks, pouring concrete and other concrete products to offset the “significant cost” of the redress scheme agreed earlier this year for homeowners who have been affected by the issue of defective products used in the building of their homes.

Defective building blocks containing excessive deposits of the mineral mica have seen thousands of properties start to crumble across the country.

An estimated 5,000 homes in Co Donegal are affected, with thousands more understood to have faulty blocks in counties Sligo, Clare and Limerick.

However, speaking this morning, representatives of the construction industry said the announcement yesterday was a “major shock”.

The Director of Housing and Planning with the Irish Home Builders Association, Conor O’Connell, told Morning Ireland that the levy will ultimately hit consumers in their pockets.

“In the best case scenario, you’re probably talking around 1500 euro per home, you know, in the worst case scenario up to 3000 Euro, obviously that depends on the type of site you’re developing. It is very variable, but there is a cost and it is a significant cost.

“It’s a levy on approved housing bodies trying to deliver affordable and social houses. It is a levy on the consumer effectively. All cost increases, all input costs, ultimately, have to be borne by the consumer and this is our major concern in relation to this.”

It is understood that a number of concerns about the levy were also raised at the Fine Gael parliamentary party meeting this evening. 

Backbench TDs Brendan Griffin, Alan Farrell, Joe Carey, Alan Dillon, and former minister Michael Creed raised concerns about the new measure, as did a number of Fianna Fáil TDs at their party meeting tonight. 

Fianna Fáil TD Willie O’Dea told RTÉ’s Drivetime the levy should be abolished, pending further discussions within Government.

“It seems to me to run contrary to the Government’s policy to make housing affordable as possible. You don’t make something affordable by increasing the price of a basic ingredient,” he said. 

Tánaiste Leo Varadkar told his party members this evening that Government will also need to find the funds for defective apartments alongside with the Mica scheme.

He said the levy has to be legislated for and “it’s important we get it right”.

Speaking in the Dáil yesterday, Finance Minister Paschal Donohoe said: “Earlier this year, the government agreed a comprehensive redress scheme for those owners who have been affected by the issue of defective products used in the building of their homes. 

“This redress scheme comes with a significant cost and, therefore, I am bringing forward a levy on concrete blocks, pouring concrete and certain other concrete products.”

The levy is expected to raise €80 million annually and it will be applied from 3 April 2023 at a rate of 10%, according to Donohoe. 

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