Minister to extend waivers for home builders

Housing Minister Darragh O’Brien is to ask the Cabinet next Tuesday to extend a waiver on development levies that is due to expire later this month.

The waiver, along with a refund scheme for Uisce Éireann water connection charges, is being credited with a surge in house building in the first quarter of this year. Builders do not have to pay local authority development charges for any residential projects started between April 25, 2023 and April 24, 2024.

The Government says the combined waiver and refund shaves an average of €12.500 off the cost of building a new home.

In a speech to the Irish Home Builders Association meeting yesterday, Mr O’Brien said: “Everyone here can see the impact the waiver on development levies and the water-connection charge rebate is having. Very soon I will be asking Cabinet to continue this waiver until the end of the year.

“If a measure works and boosts delivery, we should stand by it. A 71pc increase in home starts is a sure sign it’s working.”

Mr O’Brien said that building began on over 7,000 new homes in the first two months of 2024.

“This is a record high for the first two months of the year – up 72pc compared to January and February of last year.”

It is understood that the minister has already got agreement in principle from the Cabinet’s housing sub-committee for the extension. Once some details are worked out, Mr O’Brien will bring the proposal to next week’s full cabinet meeting.

He said the home-buying supports – Help to Buy and First Home – are “shooting out the lights” in terms of helping buyers.

“I aim to expand and extend them by another five years to give the sector certainty and aspiring homebuyers hope,” he said. “This ladder of opportunity will open up homes for a new generation and needs to be kept in place.”

It is not clear why Mr O’Brien is choosing the end of 2024 as a new deadline for the waiver, rather than extending it by a calendar year, by which time the general election would have been held. The effect of the extension is likely to be a slowdown in house commencements over the next few months, as builders no longer work to beat the April 24 deadline.

Leading property economist John McCartney, of BNP Paribas Real Estate, has argued that local authority levies and the buyer support schemes should both be scrapped permanently, as they only cancel each other out.