Minister confirms u-turn on part of defective blocks levy

The Minister for Finance, Michael McGrath, has announced that poured concrete used for precast products will be excluded from the Defective Concrete Products Levy (DCPL).

The levy was announced last October as part of Budget 2023 and came into effect on September 1.

Minister McGrath has confirmed that he will being forward an amendment in the Finance Bill to exclude the value of pouring concrete used in precast products from the levy.

The levy is calculated at five per cert of the open market value of liable concrete products on the date of their first supply. It is designed to secure a construction sector contribution towards the cost of the Mica Redress Scheme and came into effect last Friday, September 1st.

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Any amounts paid under the 5 per cent charge for these products will be refunded.

“I has become clear that the manner in which the levy impacts on the sale of certain precast products has a potentially negative impact on the export of these products and competition from suppliers into the jurisdiction,” Minister McGrath said.

“It is my belief that, taking account of the proposed amendment, the overall design of the levy balances the need to ensure some of the costs of the redress scheme are met from a source other than the Exchequer, while limiting the impact on inflation in the construction sector.

“The Department of Finance will, with Revenue’s assistance, closely monitor the introduction and operation of the levy and will continue to engage with industry to identify ways to address any issues that arise.

The amendment will come into effect on January 1, 2024 and a refund scheme will apply for the interim period to the end of 2023.

Donegal TD and Sinn Féin finance spokesperson Pearse Doherty has called the level a new homes tax. Deputy Doherty says the level should be scrapped in its entirety.

“The Government pushed ahead with their deeply flawed concrete products levy, despite all the warnings that this levy will result in higher housing and building costs for workers and families,” Deputy Doherty said.

“This is ultimately a tax on new homes. In October Minister Paschal Donohoe made repeated claims that the levy excluded precast products, from blocks and paving to lintels and posts – these claims were false.

“It was clear as soon as the Finance Bill was published that poured concrete, a key element of precast products, would be subject to the levy. The false statements from Minister Donohoe led to confusion within the construction sector and among wider industry.

“The Government applied a guillotine on this legislation – ensuring that the levy was not properly scrutinised. While I welcome the fact that Minister McGrath will now respond to the issue I raised with the Department in October last year, the Government should scrap this flawed levy, which will increase construction costs and house prices.”