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Irish Mirror
Irish Mirror
National
Louise Burne

'No guarantee' that scrapping development levies will lead to lower house prices, Dáil hears

There is "no guarantee" that the scrapping of development levies will reduce the cost of houses for buyers, the Dáil has heard.

This is despite the Government intervention — which will cost the State €308 million — saving up to the value of €12,650 per home on average.

The Government unveiled new measures worth nearly €1 billion following Tuesday’s Cabinet meeting that it hopes will accelerate the pace of building.

READ MORE: Coalition leaders deny suggestions Minister of State Niall Collins 'broke the law'

This includes scrapping the development levies required to connect new homes with roads, water and other services and increasing the Vacant Property Refurbishment Grant from €30,000 to €50,000 for vacant properties and from €50,000 to €70,000 for derelict properties. The Irish Mirror understands that it is taking between nine and 10 months for these grants to be drawn down.

The Government will also provide subsidies to fund cost-rental apartments, with grants of up to €150,000 per unit.

When The Irish Mirror asked Housing Minister Darragh O’Brien how the Government would ensure that the removal of the developer’s levy would be passed onto homebuyers, the Fianna Fáil TD indicated that the measure was put in place to increase supply.

"Obviously, viability and affordability are the two sides of the same coin," he said.

"Really earnestly, our focus on this is actually to ensure that more dormant [planning] permissions or schemes that would not have been activated are now activated to increase that supply.

"Where costs are reduced in that regard, obviously, we would like to see that cost saving where possible passed on to the homeowner.

"But we have other measures as well in place, like the First Home Scheme, the Help to Buy grant.

"Fundamentally, we need to get supply up across the board."

Sinn Féin leader Mary Lou McDonald argued in the Dáíl that removing the levies "does absolutely nothing in terms of the affordability dilemma."

She said: "The removal of the development levies is a viability measure. It carries with it no guarantee of a reduction in cost to the end buyer."

The interventions come just a week after it emerged that the Government had failed to hit its social housing targets for 2022.

It is understood that 19,000 homes are in the social housing pipeline. The target for this year is 9,100.

It is hoped that providing subsidies for cost-rental apartments will provide another 4,000 to 6,000 apartments. However, just 684 cost-rental units were completed last year.

A person must have a household income of less than €53,000 per year to qualify for cost-rental. The Irish Mirror understands that there is no plan for this threshold to change.

The Taoiseach defended the Government’s housing plan today, arguing that it is "working" but must "evolve" to deal with increasing inflation and the arrival of Ukrainian refugees who may stay in Ireland.

He said: "It is the depth of the crisis, the scale of it, that's what we're trying to deal with here.

"We need to accelerate the action we’re taking, in part because circumstances change."

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