But the latest announcement also includes a double blow for investors – a new tax on rental properties and holiday homes and an increase in Capital Gains Tax when they sell.
First time buyers are to be wooed with a rise in mortgage interest relief from 20% to 25% for the first two years of a loan, dropping to 22.5% in the third, fourth and fifth year and a slightly lower relief up to year seven.
They are also to be offered mortgage funding from the Housing Finance Agency through local authorities. And, in a simplification of the affordable housing scheme, the Government is offering to take an equity share in properties purchased.
The top rate of stamp duty is being cut from 9% to 6% but only for commercial property.
But to pay for all this the Irish government is clawing back money from other property owners. Second time buyers will see mortgage interest relief fall from 20% to 15%.
The new tax for those owning more than one property will be applied by local authorities at €200 per year on all non-principal private residences, holiday homes and private rented accommodation, and will come into effect in 2009.
In a second blow Capital Gains Tax is being increased by 2% to 22% on the profits from the sale of such properties.
Tom Parlon, director general of the Construction Industry Federation, welcomed the provisions on stamp duty and mortgage relief. 'These measures should help address the lack of liquidity, whereby first-time buyers could not access adequate finance to complete the purchase of their homes,' he said.
But the new tax on those owning more than one property was condemned and described as 'a stealth tax' by some and praised by others.
'While some taxation may be justifiable on holiday homes, we are concerned that, having established such a principle, the temptation will be to increase the tax progressively,' said a spokesman for the Irish Auctioneers Valuers' Institute.
Chief executive of the Institute of Professional Auctioneers and Valuers, Fintan McNamara, called on the government to reconsider the levy. 'While the figure may appear relatively low, it acts as a further disincentive to the many thousands of people who provide private accommodation to students and short-term dwellers, thereby relieving the State of a major burden,' he said.
'The new tax is only a pinprick for people who own property. If you have quite a few properties you will be able to afford to pay it,' said Ken MacDonald of the Hooke MacDonald estate agency.
The commercial sector should benefit from the reduction in stamp duty. Guy Hollis, managing director of CB Richard Ellis, said that reducing the stamp duty to a more equitable 6% could mean that international investors may now be encouraged.
'This move will not solve the slowdown in the commercial property sector but it should help to stimulate buying activity,' he said.