Suspension of development levies

This tax break is being gifted to developers whether they need it or not

Letters to the Editor. Illustration: Paul Scott

Sir, – It’s striking how there is precious little evidence produced that the continued waiver of all development levies represents good value for the €240 million cost (“Suspension of development levies set to be extended to boost housebuilding”, News, April 15th).

While Ministers and officials apparently believe the measure is “working,” neither the Departments of Housing or Finance have published any economic analysis of how much new housing would actually be delivered as a direct result of the scheme.

One of the main measures of any tax incentive is to what extent it is or is not funding activity that would simply happen anyway.

One can only assume this must be one of the most inefficient tax breaks possible. While the Government has apparently not seen fit to ask the question or seek any evidence before launching the scheme, the simple fact is that this tax break is being gifted to developers whether they need it or not.


There is no conditionality attached beyond the (now movable) time limit, no requirement for savings to be passed on to homebuyers, and no attempt to target away from schemes that would be built out anyway.

The waiver also applies to one-off houses, despite these typically having low land costs and being less vulnerable to viability issues.

The Government has instead decided to wilfully ignore some painful lessons from the Celtic Tiger era.

As the Government’s own Commission on Taxation and Welfare noted back in 2022, the old Celtic Tiger property-based tax incentive schemes ended up simply driving up costs and prices and transferring public funds to private developers to fund activity that would have happened anyway.

We are almost certainly reproducing those same outcomes again, at a hefty cost to the taxpayer.

However, it seems that evidence-based policy still isn’t necessary when it’s the private development industry benefitting. – Yours, etc,



Dublin 5.