A tax credit system to help first-time buyers into the property market has been proposed by the Institute of Professional Auctioneers and Valuers (IPAV).

The credit aims to help those on moderate incomes to buy a new home but critics say it would raise prices and increase profits to builders and developers.

The proposal, submitted to the Department of Finance for consideration in the Budget, suggests families on incomes of £20,000-£40,000 (€25,400E50,789) would receive a certificate confirming mortgage eligibility.

For example, those on an income of £30,000 could receive a certificate confirming their eligibility for a loan of £90,000. They could then buy a house for up to 140 per cent of this figure or more than £120,000.

The buyer would then pay only £90,000 and the builder would receive the balance as a tax credit which would be deducted from his liabilities.

At the same time a report published by the IPAV yesterday called for the repeal of provision in the Planning and Development Bill requiring developers to set aside 20 per cent of land for social and affordable housing.

The report, written by property economist Mr James Young, also recommends abolishing all tax changes implemented under the three Bacon reports.

Social housing provisions, all increases in stamp duty and taxation should all be repealed, Mr Young said.

He added that changes in stamp duty had dissuaded people from moving house.

"Stamp duty should be treated by the Government as a revenue generator and not as a mechanism to control prices."

He added that the new 9 per cent rate of stamp duty and 2 per cent anti-speculative tax meant the end of the holiday home market and should be repealed.

In addition, investors in the housing market should not be subjected to a different tax regime from those in other markets. As a result rental income should be allowed to be offset against mortgage interest for tax purposes.

"Government intervention in the housing market has made the problem worse. More intervention simply leads to more problems and more intervention."

However, according to Mr Martin Walsh, head of lending at EBS, a new home in Dublin costs £150,000 which is unaffordable for many people no matter what system is in operation.

He added that the system proposed by the IPAV would simply inject up to £150 million into a market with enough money already.

"The real issue in the housing market is the supply of building land."

Mr Tom Dunne, head of surveying at the Dublin Institute of Technology and the former chair of the commission into the private rented sector, also insisted the credit would act as a subsidy which would be capitalised into the price.

Mr Young insisted, however, that if the numbers of homes it applied to were limited, it would not feed into prices.