There is little doubt the novel proposal from the Institute of Professional Auctioneers and Valuers (IPAV) would lead to even higher house prices.

The report's author, Mr James Young, says the system, or a form of it, operates in the US and Canada among other countries. The difference is that their markets are not as fundamentally skewed as the Irish one.

Most observers would argue the housing supply is too limited and this is why prices have risen so dramatically.

As Mr Tom Dunne, head of surveying at the Dublin Institute of Technology, said at yesterday's presentation of the IPAV document, more land needs to be zoned and serviced.

"It is the duty of the State to ensure that equilibrium is achieved in the market as quickly as possible and not just to further subsidise a market and raise the price," he said.

Mr Dunne, who chaired the commission into the private rented sector, contended that the IPAV scheme was an "elaborate structure" to give grants to first-time buyers which would inflate house prices by the amount of the grant.

Another problem is that the idea would not be received favourably at the Department of Finance which is generally against offsetting tax in this way. The ESRI is wary of the proposal. Senior researcher Mr David Duffy said the institute had recommended trying to take money out of the market rather than adding to it.

The other side of the IPAV document seeks the repeal of all the changes introduced over the course of the three Bacon reports. Mr Young warned that the social and affordable housing measures in the upcoming Planning Bill would lead to increased prices as developers hold on to their land. But some property market experts think otherwise. Mr Martin Walsh, head of lending at EBS, said the Government needed to rezone and then service tracts of land. That would probably be enough but it would also be possible to use the tax system as an incentive to develop the land.