Defective homes repairs should be funded by surpluses, Coalition told

The Government should abolish the concrete levy and pay for the repairs to defective homes through projected budget surpluses, the Irish Hardware Association has said.

The group has outlined a series of pre-budget proposals in order to tackle vacancy and the cost of building, including proposals to waive the capital gains tax on empty homes for a three-year period and apply a six per cent annual tax on derelict properties.

The group — which represents more than 400 retailers, merchants, distributors and manufacturers — is also calling on the Government to extend the Vacant Property Refurbishment Grant to those with more than one unit above shops.

To tackle the cost of building, the IHA is calling on the Government to reduce the Vat on new-build homes from 13.5 per cent to 4.8 per cent, and for an alternative to the concrete levy.

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The levy proved to be controversial after the Government announced its introduction in Budget 2023.

Defending its introduction, the Government said that the cost of dealing with faults arising from the use of building materials mica and pyrite, as well as issues in defective apartments, would range from €4.5 billion to €6 billion.

After political outcry, the introduction of the levy was delayed from until September of this year and its scope was also reduced.

Speaking at a press conference on Tuesday morning, IHA president Paul Candon said “there is a strong surplus there for the Government at the moment, so they can utilise some of that to pay for the issue in terms of the mica scheme, rather than trying to penalise everybody with a concrete levy, which is going to just raise the price of construction of new homes.”

The association’s chief executive Martin Markey said the predominant purchasers of new homes are younger people. “So you’re actually penalising younger people for something from a number of years ago that they had neither hand, act nor part in,” he said. “So we think it is better to fund from the exchequer.”

The association has also said that a reduction in the Vat rate on new housing to 5 per cent for owner-occupiers would reduce the average cost of delivery of a house by €27,808.

There are concerns within Government that such a move would see the cost of the VAT cut passed eventually passed on down the line.

Mr Markey said there is “always a moral hazard” in reducing Vat.

“There are innovative ways of doing it in terms of income tax allowances over a number of years for the people who are purchasing the property so it’s not an insurmountable problem.”

The IHA said that the “above the shop” capacity is a “very large and distinct segment within the empty homes sector.”

“From a cost effectiveness and a practical reason, they need the grants to be based on the number of units rather than on the number per applicant.”