The Government’s plan to introduce a 5 per cent levy on concrete products to pay for mica building defects will add almost €300 million to the cost of delivering the Coalition’s Housing For All targets, an industry body has warned.
Commissioned by the Irish Concrete Federation (ICF), a new report estimates that the levy, which comes into force from September, will add €1,285 to the cost of building a three-bed house, ahead of the Government’s own estimate of between €400 and €800 for a typical semidetached dwelling.
This represents an increase of €295 million in the cost of delivering on the target of 33,000 homes each year until 2030, the report claims.
It also estimates that the levy will increase the cost of delivering infrastructure investment under the Project Ireland 2040 strategy, adding €5,260 to the costs of building a single wind turbine.
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“The proposed Government levy on concrete products comes at a time when costs have already risen dramatically as a result of the energy and international crisis,” the ICF said.
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“Central Statistics Office CSO data shows that the cost of ready-mixed concrete rose by 43 per cent over the two years to April 2023 and that concrete block prices rose by 30 per cent over the same period.”
In response to parliamentary questions from Sinn Féin finance spokesperson Pearse Doherty, Minister for Finance Michael McGrath said earlier this month that the levy is expected to generate as much as €32 million each year from 2024 on. But the ICF has complained that as much as 80 per cent of those revenues will be generated against ready-mix concrete as opposed to concrete blocks, which were at the heart of the mica issue.
The original 10 per cent levy proposed in Budget 2023 was expected to raise more than €80 million annually, but the plan faced fierce resistance from the building industry. The levy was then reduced to 5 per cent and its introduction delayed from April this year to September.
Other organisations, including employer’s group Ibec, the Irish Farmers’ Association and the Construction Industry Federation have called on the Government to further postpone the levy or to scrap it altogether. In a pre-budget submission Ibec said recently that the policy was “ill-conceived” and was in effect a levy on new homeowners.
The ICF has called on the Government to conduct further analysis of the policy’s impact on the concrete and construction industries as well as “end-users”.
