Sinn Féin claims concrete levy will have even higher impact on house prices than estimated

Sinn Féin TD Pearse Doherty called on the Government to scrap the levy altogether. Picture: Damien Storan

The cost of the concrete levy on construction will be higher than what the Government has estimated, Sinn Féin’s Pearse Doherty has claimed.

It comes as builders have said they want the controversial levy to be postponed for two years and want the Government to review the matter.

Finance Minister Paschal Donohoe announced changes to the levy in the finance bill and reduced the rate from 10% to 5%, narrowed the number of concrete products it would apply to as well as deferring its introduction until September next year instead of April.

But the Construction Industry Federation told the Oireachtas Joint Committee on Finance on Wednesday that it would like to see the measure deferred further to allow for a full regulatory and economic assessment of its likely impact.

Pearse Doherty said that an analysis of the costs of the policy indicated they would be higher than outlined as the inflation from September onwards was not included.

The document which was provided by the Department of Housing before the budget and published on Wednesday morning showed all development costs could be between €1,400 and €2,200 per dwelling for a typical three-bed semi-detached home.

But the cost range provided was based on tender returns from September 2022 and excluded the possibility of future increases caused by inflation, the war in Ukraine conflict and rising energy costs.

What's your view on this issue?

You can tell us here

Sean Armstrong, head of residential construction cost and innovation unit at the Department of Housing, said that the predicted cost of levy on buildings, including three-bed semi-detached houses, office developments and apartments, were made in a “snapshot in time” based on information available last month.

Following the committee, Mr Doherty called on the Government to scrap the levy altogether.

He said the Society of Chartered Surveyors Ireland made clear that the levy will directly increase building costs, challenge the viability of housing projects, and increase the cost of a semi-detached house by €1,200.

At the committee, the Society of Chartered Surveyors Ireland reiterated previous warnings that the levy, even at a reduced level, “directly increases costs” and will “undoubtedly challenge the viability and affordability of construction projects, including new homes”.

Kevin James, president of the Society of Chartered Surveyors Ireland Discussion, said that the cost exercise was carried out in a vacuum.

When asked by Fianna Fáil’s Jim O’Callaghan if there may be a drop in standards as a result of trying to avoid paying the levy, Mr Kelly said there are “far-reaching implications” in terms of the levy and there would be concern about the potential attempt to eliminate or reduce the cost.

Lisa Hone is chair of the Mica Action Group. Picture: Sam Boal/RollingNews.ie

Lisa Hone, chair of Mica Action Group, said that families living in homes affected by defective blocks see the concrete levy as a “smoke screen” and a “PR exercise” by the Government.

She told the committee that the suppliers of the defective blocks were not a “few bad apples” but a systematic failure across the country.

“The levy seems to be a smokescreen to persuade the public that the Government is holding companies to account.

“This won’t touch them. They are operating unhindered and haven’t paid one cent.”