The Government’s new 10% levy on concrete products could result in home-owners bearing an increased construction cost of up to €2,500 on an average home, a Cork-based industry representative has warned.

The measure was announced as part of Budget 2023, and will see a levy of 10% introduced on concrete blocks, pouring concrete and other concrete products to offset the “significant cost” of the mica redress scheme agreed earlier this year.

Conor O’Connell, who is director of housing and planning at the Construction Industry Federation (CIF), said he was very concerned at the impact the levy would have upon construction costs.

“We would estimate that the 10% levy could increase the cost of constructing a typical three-bedroom, semi-detached home by as much as €2,000 to €2,500,” Mr O’Connell said.

“This is a significant cost increase on top of other cost increases over the last 18 months in particular, and all costs are going to have to be paid for by someone.

“Ultimately, whether it’s a social house or whether it’s an affordable home, or whether it’s a new house for sale, that cost is going to have to be borne by someone and unfortunately, that is going to be the first time buyer or whoever to client may be,” he said.

Mr O’Connell, who is based in Cork, said that with the country already in a housing crisis the timing of the announcement was not helpful.

He said the CIF needed to fully assess the cost implications of the new levy, but he warned that the levy would not just affect housing, saying all major infrastructure projects would likely face significant extra costs.

“At a time of significant cost pressures in the construction industry, to add these costs onto people is not good,” Mr O’Connell said.

The 10% levy is expected to raise €80 million annually and it will be applied from 3 April 2023.

Defective building blocks containing excessive deposits of the mineral mica have led to thousands of properties beginning to crumble across the country.

An estimated 5,000 homes in Co Donegal have been affected, with thousands more understood to have faulty blocks in counties Sligo, Clare and Limerick.

The cost of the Government's mica redress scheme was estimated in June at around €2.7 billion.