TÁNAISTE LEO VARADKAR has defended the Government’s plans to introduce a 10% levy on concrete blocks as part of plans to offset the cost of the mica redress scheme.

The planned levy, announced as part of Budget 2023, has raised concerns within the construction industry who have said it could add up to €4,000 to the cost of building a typical home.

Varadkar was questioned by the Social Democrats Housing Spokesperson Cian O’Callaghan, who said that the levy would push up house prices for prospective homeowners.

“Does the government really propose to place the cost of shoddy building work and defective materials onto the shoulders of people who are struggling to buy a home,” questioned O’Callaghan.

Cian O'Callaghan, the Housing Spokesperson for the Social Democrats

Varadkar said that the Government was introducing the levy as part of efforts to recoup some of the costs incurred from the mica redress scheme, saying that part of the cost must fall on the construction industry.

“It’s going to cost hundreds of millions if not billions of euros to repair the homes affected by mica, we need to do that for those seven or eight thousand families affected,” said Varadkar during Leaders’ Questions.

“There is no quarry or two quarries that are going to come up with that kind of money, so we need to find some kind of way to recoup some of the cost. It’s not fair that the taxpayer should cover all of the cost.

“We believe that the cost should fall, at least in part, on the industry,” Varadkar added.

On Budget day, The Journal spoke with the Secretary General of the Construction Industry Federation, Tom Parlon, who raised concerns about the proposed levy.

He said the measure is going to cause “substantial” inflation. 

“We have a housing crisis, the whole viability of building houses is challenged. We’ll be more challenged next year,” Parlon said. 

“Our estimates from talking to our people is that the actual 10% levy on pouring concrete and blocks will add at least €2,000 to the cost of a new build house. That’s very substantial,” he said. 

Yesterday, the Society of Chartered Surveyors estimated that the levy would add €3,000 – €4,000 to the overall cost of an average three-bed-semi.

Announcing the measure during his budget speech on Tuesday, Finance Minister Paschal Donohoe said that the levy is expected to raise €80 million annually and that it will come into effect from 3 April 2023.