The Taoiseach has indicated that first-time buyers could avoid a new levy on concrete blocks introduced to pay for the cost of mica redress.

The Government announced a 10% levy on the cost of concrete blocks in last week's Budget in a bid to part-fund the €2.57bn mica redress.

However, builders have said the new levy will add up to as much as €4,000 towards the cost of building a three bed semi-detached house.

However, the Department of Finance estimates it would add €1,600. The scheme has been criticised by the construction sector, the Opposition and backbench Government TDs.

Sinn Féin is tabling a Dáil motion this week to have it scrapped.

In Association with

However, Micheál Martin yesterday said first-time buyers could be exempt from the charge when the mechanics of how it will operate are ironed out.

Finance Minister Paschal Donohoe will bring the Bill before the Dáil to underpin the measures announced in the Budget.

Mr Martin said that in advance of this, the Government will listen to concerns and suggestions from politicians and interest groups.

He told RTÉ radio: "In the normal course of a finance bill, people bring forward ideas and suggestions on how the mechanics of the application of this levy will be worked out. And it's not our objective, in the first instance, to put an imposition on first-time buyers."

The Government already provides financial support to first-time buyers through the shared equity and help-to-buy schemes. He said they did not want to have these supports eroded.

The Taoiseach defended the scheme, saying that when there is "significant bad behaviour in a sector, the sector has to respond" and drew comparisons with the industry sector that had a levy imposed on it due to the poor practices of two firms.

Mr Martin said it was necessary to raise new revenue to fund the redress for the mica homeowners.

He added: "We've seen in other jurisdictions where if you don't have a credible revenue stream to match the expenditure that you're incurring, then things can go awry very, very quickly."

Mica is a mineral found in rocks which attracts moisture and compromises the strength of blocks, causing them to crumble.

Blocks containing mica were widely used to build homes during the Celtic Tiger. The impacted homes are mainly concentrated in Donegal and parts of Mayo.

Cases have also been detected in Sligo, Clare and Limerick.

Last week, Tánaiste Leo Varadkar said the levy was necessary to raise revenue to fix the mistakes of some in the sector.

He said: "It's going to cost hundreds of millions, if not billions of euro, to repair the homes affected by mica and we need to do that for the 7,000 or 8,000 families affected.

"We're also going to need to do something to help people who live in apartments that are defective.

"There is no quarry or two quarries that are going to come up with that kind of money, so we need to find a way to recoup some of the cost. It's not fair that the taxpayer should cover all of the cost. And we believe that the cost should fall at least in part on the industry."

He dismissed suggestions from members of the opposition that a levy should be placed on the profits of the construction industry, not on concrete products.

Mr Varadkar said: "I've heard this suggestion of putting an additional levy on the profits of the construction industry - that would be passed on too."

Social Democrats TD Cian O'Callaghan asked why the Government is not directly pursuing those who were responsible for construction defects.

Mr O'Callaghan described it as "grossly unfair" the Government would seek to put the burden of construction defects on to people who are struggling to buy a home.

He said: "You've decided to introduce a levy on concrete blocks that will add a further €3,000 to €4,000 to the price of a home. On what planet does this make sense?"

Housing campaigner David Hall, head of iCare Housing, an approved housing body, warned the levy will act as a barrier to much-needed further housing development.

He said: "It [the concrete levy] will act as an imposition to developers from building houses which we need them to do. It is going to be a real challenge to try fix in contracts. Any additional levy will make things more expensive and uncertain."

Mr Hall said approved housing bodies were an attractive option for developers as they can give certainty around the contract.

However, he believes the levy could have the potential to knock that confidence.

The State rents homes from approved housing bodies, but Mr Hall said the bodies will have no option but to raise their rents as a result meaning the State will be left picking up extra costs.

He added: "The State pays us rent so they will be paying more, so they will be sponsoring their own levy and I don't think they realise that yet."

Mr Hall said the mica redress should be paid for out of increased general taxation, adding: "Making one crisis [housing] worse doesn't sound like a solution to me."

The heads of the country's approved housing bodies are due to meet with Minister for Housing Darragh O'Brien in Sligo later this month. Mr Hall said that he intends to raise his concerns about the blocks levy with the Minister during that meeting.

Sinn Féin housing spokesman Eoin Ó Broin said the Dáil motion will call on the Government to "hold those actually responsible for housing defects to account."

He is calling for a defects levy that instead focuses on the banks, the profits of big developers and those responsible for the defects.