Cliff edge in temporary waiver of development levies must be stopped –McGahon

The temporary waiver of development levies must be extended to the end of 2025 to ensure continued progress in the development of new build homes in rural Ireland, a Fine Gael Senator has said.

Senator John McGahon said: “In May 2023, Cabinet agreed to a Development Levy Waiver Scheme. Under this Scheme, builders of new-build homes will not be required to pay a development levy, so long as the commencement of on-site work began not earlier than April 25th 2023, and no later than April 24^th 2024. Instead, the local authority invoices the amount of the levy to the Government, who refund it back to the local authority.

“With projected population figures rising alongside construction costs, the need to build more new homes becomes even greater. It is crucial that we do not see a cliff edge in relation to the waiver due to the prohibitive cost for people trying to build their first home.

“In County Louth, for example, the development levy cost is €11,600. That is a highly prohibitive cost to put on people where we are already witnessing rising costs for building supplies.

“We have seen a significant increase in the number of commencements in the past 12 months as a result of the waiver. This must be extended so more people can build in rural Ireland and to ensure it thrives.

“Based on commencement notice data on residential construction starts, 32,801 homes were commenced in 2023 as against 26,957 in 2022, representing an increase of 22% over 2022. This trend has continued positively into 2024, with the latest commencement notice data indicating that works on a further 7,056 homes were commenced in January and February of this year, representing a 71% increase for those two months compared with the same period in 2023.

“These commencement rates for 2023, and for the first two months of this year, are at the highest levels since records began in 2015.

“The waiver on development levies is working. It is making it cheaper to build and cheaper to buy. That is why I am calling on Minister for Housing Darragh O’Brien to extend the Development Levy Waiver Scheme to the end of 2025.” Senator McGahon concluded.