Warning that concrete blocks levy could increase cost of a new home by €3,000

The levy has been introduced to help fund a redress scheme for people whose homes have been affected by mica. Picture: Sam Boal/RollingNews.ie

A number of Fianna Fáil TDs have called for the postponement of a new levy on concrete blocks announced as part of the budget due to fears it will push up building costs.

Finance Minister Paschal Donohoe announced a 10% levy on concrete blocks, pouring concrete and other concrete products with the levy to take effect from April next year.

The levy has been introduced to help fund a redress scheme for people whose homes have been affected by mica. It is expected to raise €80m of the €2.7bn remedial mica scheme which includes apartments with defects.

However, organisations representing builders have said the levy could increase the cost of a new home by up to €3,000.

Conor O’Connell, who is director of housing and planning at the Construction Industry Federation (CIF) said ultimately the cost will “have to be borne by someone and unfortunately, that is going to be the first-time buyer or whoever the client may be”. 

Speaking to the Irish Examiner, Fianna Fáil TD Jackie Cahill said he wants the levy to be postponed for two years. He said he spoke to Taoiseach Micheál Martin last night on the matter and said Mr Martin acknowledged Mr Cahill made a “valid point” and that it would be discussed further.

Mr Cahill also wrote to Public Expenditure Minister Michael McGrath on Wednesday morning asking for the levy to be postponed.

Mr Cahill said: “I fully accept we have to have a levy, the money to fund the mica scheme has to be got somewhere but the levy is a significant increase and now is not the time.

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“I have written to Michael McGrath to request the levy be postponed for two years because the cost of concrete has already gone up in the last seven months.” 

James O'Connor also said he feels the levy needs to be reconsidered, stating: “Budget 2023 is a hugely positive moment for the Government. However, I feel the decision to hike the concrete levy is going to increase building costs in the midst of a major housing crisis."

The Fianna Fáil TD added: “It should be postponed until a later date.” 

It is understood other Fianna Fáil TDs that have expressed concern include Willie O’Dea and Padraig O’Sullivan. A number of Fine Gael TDs have also said they have concerns about the proposal including Carlow-Kilkenny TD John Paul Phelan and Mayo TD Alan Dillon.

Speaking on RTÉ's News at One on Wednesday, Housing Minister Darragh O’Brien said the levy was a sustainable funding scheme to deal with the mica and pyrite redress schemes.

He said the Department of Finance estimated that the levy will mean a 0.4% increase in the cost of concrete products being used to build homes.