Dáil Éireann Debate, Thursday - 23 November 2023
146. Deputy Pearse Doherty asked the Minister for Finance for an assessment of the additional cost to construction of a standard 3-bed semi-detached house arising from the concrete product levy in the context of the current market price of concrete, cement and in-scope concrete products; and if he will make a statement on the matter. [51431/23]
View answerAs the Deputy will be aware, there are a wide range of factors which influence the viability of developments. These include the dynamics of our planning system, infrastructure requirements and land costs, as well as hard and soft costs. While housing policy and remediation for homeowners affected by defective blocks are matters for my colleague, the Minister for Housing, Local Government and Heritage, measures have been rolled out by Government and that Department to specifically address market conditions applicable to pipeline delivery, inflation and interest rate increases.
The Government’s Housing for All plan has identified a number of actions across all areas of the housing market to address these challenges with a record €5.1bn capital investment being made in housing in 2024.
In relation to the impact of the Defective Concrete Products Levy on construction sector costs, the Department of Housing, Local Government and Heritage commissioned analysis in September 2022. This exercise was again carried out in November 2023. Both reports were prepared by an independent Construction Economics Cost Consultant.
The analysis prepared in September 2022 found that the new levy (adjusted to 5%) would result in an increase in construction costs of approximately 0.2% to 0.45%.
The most recent report, prepared in November 2023, found that levy is expected to result in an increase in hard costs of between €445 to €650 for a typical 3 bed semi-detached house and between €430 to €640 per apartment in a typical 6 floor apartment block with basement carpark. When soft costs including cost of finance, fees, risk and contingency are included the impact of the levy for a typical dwelling house or apartment were estimated to be €800 to €1,200.
The increase as a percentage of total development costs remain similar when the 2023 and 2022 reports are compared.
The 2022 report was published on my Department’s website following Budget 2023. The 2023 report will be published on my Department’s website in due course.
The Deputy can be assured that the impact of the Defective Concrete Products Levy will continue to be closely monitored by my officials, who will review its impact and operation on an ongoing basis, as is the case with all charges that are placed on taxpayers.
