Levy to raise up to €2.8bn for remediation costs on Celtic Tiger-era buildings should be considered
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A levy to raise billions of euro in remediation costs on Celtic Tiger-era buildings should be considered similar to the banking and insurance levies, but can not be retrospective, a new report has found.
With a looming bill of up to €2.8bn for remediation, a levy on the construction industry had been touted as a source of funding.
However, the report of the working group on defects in boom-era buildings has found that a levy on the construction industry would "require careful policy, legal and public scrutiny".
The group, set up by Housing Minister Darragh O'Brien will publish its long-awaited report on Thursday and has found fire safety, water ingress, and structural issues are present in 80% of apartments built between 1991 and 2013. That equates to between 62,500 and 110,00 units.
With average remediation costs of more than €25,000 and just 10% of apartments having been repaired, the bill could come in anywhere between €1.7bn and €2.8bn.
The report says the group understands it is "not feasible retrospectively to impose a penalty on the individual firms that were responsible for the defects" and that levying across the entire industry may impact firms which had no fault in the defects.
However, it does point out that sectoral levies exist in both banking and insurance and that a levy on blockmakers is being considered to pay for the cost of the mica scheme.
However, those considerations notwithstanding, the report says any examination of a levy as a funding source should take account of the group's findings.
It adds the levy should be "considered in the context" of it being one of four funding options laid out in the report — loans, grants and taxation are the others. The grant option should be considered from a cost perspective.
Before it went into recess, Leo Varadkar told the Dáil there would have to be State intervention.
The Tánaiste said he had seen the issue in his Dublin West constituency and that the “basic principle” was that the Government would assist.
“People have been sent bills, sometimes for €10,000 and sometimes for as much as €60,000 per apartment, to carry out necessary repairs,” he said.
However, he later said the State alone would not carry the cost.
Meanwhile, Pat Montague — spokesperson for the Construction Defects Alliance — said that the findings of the report were not a surprise and the reality was that “serial offenders” who were responsible for “shoddy buildings” remained in business.
There remained “deep institutional resistance” by “certain parts of public administration” to any changes in the law, he said.
“They are loath to do anything that will affect builders. They need builders to build homes. They are very reluctant to do anything that might stop the flow of new homes”.
Because there have been no consequences, the process [of building shoddy homes] was continuing, he told Newstalk.
There needed to be “a considerable shift” in how regulations were enforced and better remedies needed to be made available to consumers when difficulties arose.
Mr Montage said he did not understand why there was such resistance when people could not drive a car without insurance, it should be the same when it came to building a home. It would be better for people to pay into a scheme that actually helps.