Big pay deals force €28,000 levies on new home buyers
Wednesday November 12 2003
Cash-strapped councils in counties across Ireland are imposing significantly increased service levies on all new homes.
In one county, Wicklow, the price of a modest three-bed semi-detached home will soar by €17,500, while larger, stand-alone properties will be hit by a €28,000 bill, the Irish Independent has learned.
Buyers of new houses in Kerry will have to pay up to €9,500, while those in Clare face bills of €12,000.
All other councils are looking at just how much more they will charge.
Before benchmarking drained their coffers, most councils levied modest amounts on new houses. But now, financially crippled by government cutbacks and facing a €220m benchmarking bill, they are being forced to increase them by huge amounts.
From March 2004, councils are legally obliged to introduce levies on new developments to bankroll infrastructure such as sewerage, roads and water. But few anticipated the levies would be so big.
The money is ringfenced to provide services and infrastructures linked to new houses, but that will come as little compensation to tens of thousands of potential buyers.
It will also send house prices soaring at a time when the Government is trying to dampen property price inflation.
Those worst affected are likely to be first-time buyers, who will effectively see the equivalent of a deposit taken from them in levies.
The disclosure is certain to become a major political issue for the Government, which has spent the past five years trying to halt the upward house-price spiral.
But councillors all over the country are up in arms. Council officials face an uphill battle to push through the increased levies and they feel they are in a Catch-22 situation - if they bring in the new charges there will be uproar in the run-up to next year's local elections, but if they don't they will not have sufficient resources to improve dangerous roads and other vital services. The Irish Independent learned last night that Wicklow Co Council has just proposed a development levy of €140 per sq metre on all new houses in the county. It will apply to new homes in estates or on their own sites in the countryside.
The new service charge will add €17,500 to the price of an average three-bedroom house in an estate, according to Wicklow's Fine Gael TD, Billy Timmons, who described the proposed charges as "astronomical".
Buyers of one-off houses of 200 sq metres connected to the council sewerage system will be expected to pay €28,000.
And one-off houses of a similar size in the countryside and providing their own septic tank and other waste treatment facilities will incur extra bills of up to €20,000.
In Co Clare there was a walk-out by Fine Gael and independent councillors over the council's plans to put in a place a levy of up to €12,000 on new homes across the county.
The levies are needed to generate €67m in improved infrastructure up to 2009 and will be raised by imposing levies on 4,500 houses that will be built in Clare before that date.
The Planning and Development 2000 Act lays down that if a council does not agree on a levy scheme by March 14 next, it will have no funding to put in place its infrastructural programme and will not be able to impose any levies attached to planning permissions.
Kildare and Dun Laoghaire Rathdown councils have also indicated that they will be forced to seriously increase their development levies on new houses, and all councils are expected to follow suit shortly.
Wicklow's Billy Timmons said: "This is a frightening figure and is very unfair.
"We might as well put up a sign saying 'No more housing' or 'No more room at the inn'," the Fine Gael TD said.
- Treacy Hogan Environment Correspondent
