The 10% concrete levy announced by the government in Budget 2023 will add €3,000 to €4,000 to the delivery cost of the average three-bedroom semi-detached home, according to the Society of Chartered Surveyors Ireland (SCSI).

Minister for Finance Paschal Donohoe said the levy on concrete blocks, pouring concrete, and certain other concrete products, which will be applied from 3 April next year, is expected to raise €80m annually and will help to fund the mica and pyrite redress schemes.

Reacting to the Budget announcement, SCSI president Kevin James said the levy would add to the challenge of hitting the target of increasing housing output by 8% every year until 2030 under the Housing for All plan.

Some 25,000 new homes were built in the past 12 months, while 28,000 have begun construction, and a further 44,000 have been granted planning permission, according to Donohoe.

Department of Housing figures show the 31,000 homes started construction in 2021, an annual increase of 42% from 2020 (21,686), but just 18,047 new residential addresses were added to the GeoDirectory database last year -- a decrease of 17.4% year-on-year.

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"For many years we have been urging the government to tackle the soft and hard costs of new home construction. In this budget no measures aimed at tackling soft costs were announced while the introduction of the levy will drive up hard costs," said James.

"The Minister said that planning permission has been granted for 44,000 new homes this year but the introduction of this levy in April next year has raised question marks over the future viability of those homes and their affordability for first time buyers.”

The SCSI welcomed the extensions of the Residential Development Stamp Duty Refund Scheme, which lowers stamp duty on and developed for residential purposes from 7.5% to 2%, to the end of 2025, and Help to Buy were positive.

The group was also pleased by the introduction of €500 tax credits in 2022 and 2023 for renters, but James said the failure to introduce meaningful reforms for the rental sector would be seen as a missed opportunity.

He added that the doubling of pre-letting expenses for private landlords from €5,000 to €10,000 would not halt the exodus of private landlords from the market.

“Our research shows low returns are one of the main reasons landlords are leaving the market. In our pre-budget submission, we called for a levelling of the tax field between private landlords and institutional investors and clearly that has not happened as this measure will have very limited impact," James said.

"There is a supply crisis across the rental sector, particularly as we have seen in recent weeks in regard to student accommodation. One of the other reasons landlords are leaving is because rental legislation is overly complex. After today we believe, landlords will continue to vote with their feet and rents will remain high due to the lack of supply.”

James also said the introduction of a vacant home tax would not be effective, with many local authorities failing to hire full-time vacant home officers and a high proportion of the 167,000 vacant properties in Ireland already expected to become available long-term.

"Between exemptions and the fact a home will not be ruled vacant if occupied for 30 days in a 12 month period we believe this measure will have very limited effect," James said.

"Without vacant home officers, without targets and without the necessary funding, vacant units will remain just that.”

(Pic: Getty Images)