Committee to be told concrete levy will add €1,200 to cost of new three-bed home
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The Government's concrete levy will add €1,200 to the cost of a new three-bed home, an Oireachtas committee will be told on Wednesday.
The controversial levy was first announced in the Budget at 10% but was revised down to 5% by Finance Minister Paschal Donohoe in the Finance Bill, after backlash from backbench Government TDs.
The Oireachtas Finance Committee will on Wednesday discuss the levy, which is designed to go some way to dealing with the multi-billion euro costs of remediating both the homes affected by the Mica scandal, and Celtic Tiger-era homes.
In its opening statement, the Society of Chartered Surveyors Ireland (SCSI) will tell the committee that increasing costs are already "pushing planned developments out of viability".
The SCSI Tender Price Index is running at 14% inflation for commercial construction; and the largest contributor to tender inflation over the past 12 months is material prices.
The society will say that the levy "directly increases building costs" and that new block-built homes will have €1,200 added to their prices, with €700 added to timber frame homes.
A regeneration of an office block in Munster would, for example, see €350,000 added to the overall project. Apartments would have between €400 and €700 added per unit, the SCSI will say.
Tom Parlon of the Construction Industry Federation (CIF) will say that a lack of clarity on which products the levy will apply to is creating uncertainty within the industry.
He will add that businesses which have no responsibility for defects will be forced to pay the levy. The CIF head will also say that local authorities and the National Standards Authority of Ireland should mandatorily check homes as they are being built.
Timmy Hennessey of the Department of Finance will tell the committee the 5% levy will kick in next September, and apply to ready-to-pour concrete, but not pre-cast materials.
He will disagree with the SCSI figures, however, saying that the levy will add between €400 to €800 for a typical 3 bed semi-detached house, and between €375 to €550 per apartment in a typical 6-floor apartment block with basement carpark.
A submission from the Mica Action Group, however, will say: "The concrete levy says to the industry: You can violate regulations. You can wreck and endanger people’s lives. You can be the cause of a multi-billion-euro cost to the taxpayer. But there are no consequences."