The levies were introduced in 2003, by our old friend Martin Cullen. Of course Minister Cullen has never been one to let public opinion, obvious flaws or a massive overspend stand in the way of one of his little projects. Sure what are the taxpayers for if not to pay tax and fund spending?
Now I'm not a Fine Gael supporter, I am (maybe I should change that to "was") actually a Fianna Fail voter. In years gone by I was an active Fianna Fail supporter but in recent years I have grown more and more disillusioned with Fianna Fail and the incompetence of some ministers. In this case I find myself 100% in agreement with Enda Kenny when in 2003 he was quoted in the Irish Examiner
Fine Gael leader Enda Kenny told the Dail that new homebuyers could end up footing a 600m stealth tax bill that will make it impossible for many young people to get on the property ladder.
"If the average charge for a new house was 10,000 for a small three-bed semi-detached home, then new homebuyers will pay a stealth tax worth 600m next year if there are 60,000 new homes built," Mr Kenny said.
Martin Cullens response to the obvious flaw was typical of the current government. He stuck his head in the sand and said there was no problem while his department effectively gave the green light to developers to pass on the charges by saying there was no law to stop them.
However, while Environment Minister Martin Cullen insisted yesterday that new homeowners would not be faced with a bill from local authorities, his department confirmed there is no law to stop developers passing the levies onto homebuyers.
Now the levies are headline news in today’s newspapers. The Irish Independent is leading the charge and has a particularly good article outlining the exact figures and explaining how much house buyers are paying. Unfortunately the website requires registration, but it is free. Alternatively just go buy a copy of the paper itself :-).
The levies, meant to be paid by developers, are being passed on directly to homebuyers, adding up to 6pc to the price of the average new home.
A typical €350,000 home would include a €20,000 levy, according to the Irish Home Builders' Association (IHBA), representing the majority of builders.
Of course everyone is pretending to be surprised and shocked at the behavior of the developers but lets be honest here it is the current government who, with a nod and a wink to the developers, passed this bill and they are not likely to climb down now.
You should not fail to notice it is the Builders Association that is highlighting the issue. I dont believe they are doing this out of the goodness of their hearts. Should the government scrap the levies the developers could just pocket the 6% increase themselves rather than reduce house prices. Either way people looking to get onto the property ladder in this country are being milked by every vested interest and have been abandoned by the very government which should be trying to protect them.