Government extends development levy waiver and Uisce Éireann rebate

Publishing its Housing for All Q1 2024 Progress Report in April 2024, government confirmed extensions to the development levy waiver and the water connection charge rebate scheme aimed at reducing residential construction costs and sustaining increased housing development commencements.

Commencements in Q1 2024 increased by 63 per cent relative to the first three months of 2023. Government attributes this significant increase to initiatives including the development levy waiver and the Uisce Éireann rebate, which it says, “are having a really positive impact”.

As such, government has extended the availability of the development levy waiver (a suspension of local authority ‘section 48’ development contributions) until 31 December 2024 and the Uisce Éireann rebate (a refunding of water and waste water connection charges) until 30 September 2024. “The extension is designed to ensure we continue to boost the supply of new homes,” it explains.

Initially, the temporary development contribution waiver scheme was set to apply to all permitted residential development which was to be completed no later than December 2025, for the year between 25 April 2023 and 24 April 2024.

On 30 April 2024 – as a result of the imminent expiration of the suspension of levies and the Government’s agreement to extend them – the Department of Housing, Local Government and Heritage (DHLGH) issued a circular (PL 02/2024) outlining the details of a new package of a new package of measures aimed at incentivising the commencement of housing developments.

In relation to the suspension of ‘section 48’ development contributions, the circular indicates that:

• development works on qualifying houses must commence no later than 31 December 2024; and

• completion date for works to qualifying units has been extended to 31 December 2026.

Claims for the levy waiver must be submitted to local authorities no later than 28 February 2025.

Meanwhile, DHLGH’s circular outlines the updated conditions for the refund of Uisce Éireann standard connection charges.
The time-limited refund scheme applies to residential developments that:

• commence on site between 25 April 2023 and 30 September 2024; and

• are completed not later than 31 December 2026.

This completion date applies to all qualifying houses commenced since the introduction of the scheme, including those that have already commenced prior to the extension of the levy waiver and water charge refund arrangements.

Applications for Uisce Éireann refunds will only be accepted up to 31 December 2024.

Speaking with the Housing Ireland Magazine, Housing Minister Darragh O’Brien TD asserts: “I had to do something to reduce costs… I brought in the temporary development levy and water connection charge rebate which saves up to €20,000 per unit. We have seen a massive response to that… [with] 18,000 homes started in the month of April this year [2024] and 53,000 homes started in the last 12 months.”

However, Sinn Féin spokesperson on housing, Eoin Ó Broin TD believes the development levy waiver has done nothing to make homes cheaper to buy, stating: “While the waiver may make some smaller housing schemes more viable, in most cases it will simply boost larger developers’ and investors’ profits. There is no way to ensure that the savings to the builder are passed onto the purchaser or the tenant.”