A 10% levy on concrete blocks, pouring concrete and certain other concrete products in order to raise €80m annually to fund the defective blocks scheme for redress for homeowners affected by mica was announced in the Budget yesterday.

The Minister for Finance said the construction industry levy is needed to pay for the "significant cost" of the redress scheme.

However the Construction Industry Federation said the new levy had come "as a major shock" and will ultimately be passed on to the consumer.

The Director of Housing and Planning with the Irish Home Builders Association, Conor O'Connell, said the defective concrete products levy included in the Budget will "in a best case scenario" add €1,500 to the cost of building every home.

Speaking on RTÉ's Morning Ireland, Mr O'Connell said the worst case could see up to €3,00 being added to the construction costs.

He said there was no consultation in relation to the impact of the cost of this increase on the industry, what it would do for the consumer and how much extra cost would be added to first time buyers.

"I'm not sure if the regulatory impact assessment was carried out or any economic assessment in relation to the impact of this levy on the consumer," he stated.

He said the construction industry "understand the dilemma the Government has in relation to a faulty product that was supplied into the construction sector".

But he said the Budget measure will result in a "levy on the first-time buyer, a levy on someone trying to extend their home. It's a levy on approved housing bodies trying to deliver affordable and social houses".

"Effectively all cost increases ultimately have to be borne by the consumer, and this is our major concern in relation to this," he added.

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Mr O'Connell said the last few years have been an extraordinary period in the construction sector with Brexit, shutdowns due to Covid-19 and the war in Ukraine.

The industry "would have been very hopeful that given the extraordinary set of circumstances that developed in relation to material supply and material costs that there would have been, greater consideration given to the economic impact of this on the consumer," he said.

He also rejected the notion the huge profits are being made in construction.

"I wouldn't accept that there's very large profits being made by small and medium housebuilders", he said.

"It's only been very recently where it's become commercially viable to construct houses for sale in many parts of Ireland, and the reason that it's being so marginal is because of the cost element of developing, and that's not just due to the construction costs," he explained.

"That's due to the regulatory costs and other taxes and levies that are imposed and ultimately the consumer, ultimately the first-time buyer and purchases of new homes," he added.