Construction industry levy and vacant homes tax expected in budget 

Around €80m of the €2.7bn mica redress scheme is expected to be raised by a levy targeting the construction industry

Housing Minister Darragh O’Brien proposed a construction levy last November and sources say it is being prepared for inclusion in Budget 2023. File picture: PA

A construction industry levy aimed at raising around €80m is expected to be included in this month's budget, together with a tax on vacant homes.

The industry levy has long been mooted as a way to fund the €2.7bn mica redress scheme to remediate homes built with structurally unsound concrete blocks.

Housing Minister Darragh O’Brien proposed the idea of a levy last November and sources say it is being prepared for inclusion in the budget in less than four weeks.

While the yearly income generated by the levy will only meet a small portion of the overall remediation bill, sources said it may not be time limited and will likely run for “at least the duration of the scheme”.

The legislation underpinning the Government’s redress scheme which was signed into law in July, having passed the Oireachtas in controversial circumstances.

Former education minister Joe McHugh voted against the legislation with a “heavy heart”. 

He said a proposal that means those rebuilding their homes at a smaller size than previously would not receive 100% of the cost should be removed. 

Mr McHugh voted against the second stage of the bill before voting with Sinn Féin on a number of amendments, causing the Government to lose its overall Dáil majority.

Mica campaigners, who confirmed that they are to form a political party, protested at the gates of Leinster House at the time. Campaigners say that the Government’s €2.7bn scheme does not offer 100% redress for homeowners.

Meanwhile, a vacant homes tax, which was also previously flagged, is also to be included in Budget 2023 later this month. Sources say the structure of this tax is being set out by Department of Finance officials.

Finance Minister Paschal Donohoe said in July he would introduce the tax in this year’s budget after Revenue data showed more than 57,000 vacant homes across the country. Mr Donohoe said that he would ensure that any such tax does not “excessively penalise a homeowner for what could be a normal and temporary vacancy”.

Sources said that, while government departments sent their spending proposals to the Department of Public Expenditure last week, bilateral meetings are just beginning, so the shape of many budget proposals will become known in the coming days. Much focus will be on how the Government achieves a cut to the cost of childcare. Green Party sources say this is a key priority for the party, with one source insisting that any move “must benefit parents”.

Children’s Minister Roderic O’Gorman will push for “a significant investment” in the national childcare scheme  over the next two budgets, with the final goal of cutting fees by half. It is understood that the cuts will come in equal measures if accepted by the Department of Public Expenditure.

Last year’s budget included an overhaul of the rates of pay for childcare workers, which is set to be agreed in the coming weeks.

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Mr O’Gorman said that, once it is agreed, it will allow the Government to roll out its new €221m “core funding” for the childcare sector to providers. The systematic overhaul of the sector was seen as key to cutting fees.

Green Party leader Eamon Ryan is also said to be strongly pushing the idea of a windfall tax on energy companies which make excessive profits.

While such a tax would bring in around €100m, Green Party sources said that it would be a significant statement from the Government.