Builders ‘let off hook’ over special levy

THE Government was accused last night of letting builders off the hook when it emerged they have only paid a special social housing levy on 400 out of 80,000 houses.

This levy was introduced two years ago as part of a special deal between the Government and the construction industry after intense lobbying.

The builders wanted these 80,000 houses, whose planning permissions were about to expire, to be exempt from a new rule that required 20% of all new developments to be social and affordable housing.

The Government agreed to the new exemption deal on condition that builders pay a special social housing levy 1% on houses over €270,000 and 0.5% for houses less than that.

But Labour revealed yesterday that builders have only paid the levy for 400 of these houses so far with just a year left on the planning permissions deadline.

"It is incredible that the levy has only been paid on this number of houses given that the annual housing construction is approximately 70-80,000," said Labour environment spokesman Eamon Gilmore.

Environment Minister Dick Roche has confirmed to Labour that only €236,316 of the levy was collected last year and only €392,000 for the first six months of 2004.

"This represents payments for around 150 homes last year and only 250 so far this year," said Mr Gilmore. Labour called on the Government to explain why this levy has not been paid almost in full when there is only one year left on the planning permissions.

"This levy was to be ring-fenced for social and affordable housing, and those waiting for housing are entitled to know if this government has let the builders off the hook yet again," Mr Gilmore added.

But the Department of the Environment completely rejected Labour's claim.

The terms of the deal were that the levy would be collected when these houses had been completed, the department spokesman said.

"Many of them are in the construction phase and there is still a year to run before the planning permission expires." he added.

"Some of these 80,000 may not go ahead but there is no question of anyone getting off the hook the levies will have to be paid on all houses built when the deadline expires," the spokesman added.

Meanwhile, the Irish Home Builders Association (IHBA)|also rejected Labour's claim that the Government had let them off the hook.

Without the extension of planning permission to these 80,000 houses, the building output would have been stalled and the current record levels would not have been achieved, the

IHBA spokesman said.

"Housing developers in receipt of such extended permissions comply with the requirements as laid down, and pay the required levies," he added.