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HOUSING MINISTER DARRAGH O’Brien has warned Finance Minister Paschal Donohoe that Fianna Fáil TDs and Senators have “serious reservations” over the 10% concrete levy.
The 10% levy on concrete blocks, poured concrete and other products was announced as part of Budget 2023 as part of a plan to offset the cost of the mica redress scheme.
The levy itself is expected to raise €80 million a year.
The proposed levy has raised concerns in both political and industry circles, with the Society of Chartered Surveyors warning that a 10% levy on concrete products could push up the price on homes by up to €3,000 – €4,000, with the price set to be passed on to prospective house buyers.
In a letter sent by O’Brien to Donohoe, seen by The Journal, the Housing Minister says that while Fianna Fáil TDs and Senators had broad agreement with the principle of the levy, they raised concerns over its timing, format and application.
“These concerns were particularly acute in the context of inflationary pressures on the building sector and need to boost housing supply,” the letter reads.
O’Brien said that party members believed the timing of the levy was “inappropriate” and that both the format and application of the levy needed to be “reconsidered”.
O’Brien added that he would engage with Donohoe ahead of the Finance Bill, which is set to be introduced to the Dáil on Thursday.
Last week, O’Brien held a special meeting with the Fianna Fáil parliamentary party, chaired by Dublin South West TD John Lahart, to discuss the levy.
The levy has been defended in recent weeks by both the Taoiseach and Tánaiste, with Micheál Martin saying that the cost of the mica redress scheme needed to be funded either from the industry or through the taxpayer.
However, the levy has been raised at both Fianna Fáil and Fine Gael parliamentary party meetings, with TDs in both parties raising concerns.
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Have they found a way to blame Sinn Féin yet?
@Niall Power: Only Monday yet
It’s not surprising Fine Gael, the party of the rich, want to increase house prices for first time buyers.
We allowed banks to self regulate then the taxpayer had to bail them out, we allowed the insurance industry to self-regulate then the taxpayer had to bail them out and we allowed the construction industry to self regulate and now the taxpayer has to bail them out. There was a cosy relationship between construction and recent governments but trust has been permanently damaged. Not just mica but fire safety. Corners cut everywhere and no one accountable. If it adds 4K to the cost of a new house to build it in a manner that means it won’t crack and crumble into the ground within ten years then that is a cost worth paying.
@Sean: how long have you had a house Sean?
@Sean: that 4k figure is an absolute myth, based on figures that nobody thought to check.
This will be a great excuse for FF to pull the rug out from under Lord Veradader before his coronation in December.
The builders will get the maximum price they can for a house. The price they get will be determined by supply and demand. So the builder or developer will be the ones paying for the levy. The suggestion that if you put a levy on concrete the builder will just add it on to the price of the house is just simplistic.
@Mick Hyland: In simple terms this is correct.
But if a developer has input costs that increase by say 1%. Then 99 houses get built instead of 100. So it’ll still affect supply.
@Paolo Fandango: Why would only 99 houses get built if the developer’s input costs increase by 1%? The developer is not operating with a fixed pot of money; as long as he’s making an attractive return on capital he will continue to build more houses.
@Mick Hyland: the 1% is being absorbed by the developer. Fixed pot or not, it’s still less net income which reduces the amount of assets they can build.
The 1% cost doesn’t just disappear
So this is to offset the cost of mica redress scheme (which I believe impacted over 7000 homes). Am I miss understanding something here, but why is the whole Country now being forced to pay and contribute to a concrete levy (which we know will be permanent)? I know they are raising funds to offset, but this seems the complete wrong way to do it! Building material costs are already excessive.
I’m simple terms this is correct.
But if a developer has input costs that increase by say 1%. Then 99 houses get built instead of 100. So it’ll still affect supply.
@Paolo Fandango: this was supposed to be a response to mick above.
have your say