According to the committee, the additional costs of collecting concrete will rise above forecasts

An Oireachtas committee has been told that as a result of the concrete levy, the additional cost of a typical three-bedroom semi-detached house will rise above the forecast €1,200.

Updated figures were provided to the Oireachtas finance committee on the extra cost of building houses after the introduction of the concrete levy, but do not include inflation or energy costs.

The government has halved the concrete levy from 10 per cent to 5 per cent after government ministers and construction industry officials expressed concern that it would increase the cost of building amid a housing crisis.

The levy will be delayed from April until September 1 and is expected to raise €32m over 12 months, less than half of the €80m originally expected.

Treasury officials who appeared before the committee on Wednesday acknowledged that the impact of house building spending would be greater than reported.

Sean Armstrong, head of housing costs and innovation at the Department for Housing, said the projected cost of the levy for the buildings, which include three-bedroom semi-detached houses, office developments and flats, was made in a “snapshot in time” based on information, available last month.

He ruled out rising energy costs, inflationary costs and other factors.

Actual additional costs will exceed the projected €1,200 for a three-bedroom, three-bedroom building and a projected additional €350,000 for a major refurbishment project including office and retail space.

A levy on 18 concrete products and concrete pours was announced as part of Budget 2023 to fund a compensation scheme for people living in homes built with defective building materials.

Tom Parlon, chief executive of the Construction Industry Federation (CIF), said some developments have been put on hold, while some first-time buyers are delaying purchases because building projects are no longer viable.

Mr Parlon said the government’s decision to introduce a specific levy would add to the cost of housing and buildings.

He said he had not seen the level of cost growth in 40 years.

Kevin James, president of the Chartered Surveyors’ Debating Society of Ireland, said the costings were done in a vacuum.

He said 45,000 homes a year needed to be built over the next 10 years to meet demand, but added that the projects needed to be viable.

Mr James warned the government’s housing targets would not be met unless the costs of high-density development were “unlocked”.

Lisa Hohn, chair of the Mica Action Group, said families living in houses with defective blocks saw the concrete levy as a “smoke screen” and a “PR exercise” by the government.

She told the committee that suppliers of defective units were not a “few bad apples” but a systematic failure across the country.

“The levy appears to be a smokescreen to convince the public that the government is holding companies accountable,” Ms Hon said.

“It won’t affect them. They work smoothly and have not paid a single cent.

“We are still waiting for the appointment of a senior counsel to work out the way forward to prosecute the criminal.

“We are also awaiting an audit report from (Housing Minister) Darragh O’Brien. The report was prepared in late June, but homeowners interested in the contents had no information. People feel abandoned.”

She added: “There is a lot of anxiety among families about funding to rebuild their homes.”

Frank Kelly, president of CIF, warned that contractors will look to pass on the cost of concrete collection, whether it’s a one-off property or a large residential or commercial building.