Sinn Féin has urged the Government to have a last-minute rethink of the concrete block levy, which industry bodies have warned could add substantially to the cost of building homes and infrastructure. The levy is due to be implemented on Friday.
The 5 per cent levy on concrete products, through which the Government is aiming to claw back funds to pay for the remediation of mica-related building defects, has faced stiff criticism since it was proposed in last year’s budget.
Last September, the Economic and Social Research Institute (ESRI) said the dedicated levy was unnecessary and that the cost of mica redress could be borne by the exchequer out of the corporation tax receipts, which topped €22.6 billion last year and are suspected to surpass those levels in 2023.
The levy is forecast to raise about €32 million each year from 2024 on, according to the Department of Finance.
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But the Irish Concrete Federation (ICF), an industry body representing concrete producers in the Republic, has noted that as much as 80 per cent of that revenue would be generated against ready-mix concrete instead of concrete blocks, which were at the heart of the mica issue.
The ICF also warned the levy could add as much as €300 million to the cost of delivering on the Government’s Housing for All targets.
On Wednesday, Sinn Féin finance spokesman Pearse Doherty said the Government should scrap the “flawed and counterproductive” charge.
“In effect this levy will amount to a tax on new homes,” the Donegal TD said in a statement. “When every effort should be made to reduce the cost of home building, with over 12,000 people living in emergency accommodation, this levy will increase the cost.”
With the price of building materials having ballooned over the couple of years, Mr Doherty said: “It is clear that the Government’s levy on concrete products was ill-conceived and badly designed, with its cost set to be shouldered by already struggling homebuyers.”
The original 10 per cent levy as proposed 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 employers’ 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.
