Fine Gael is proposing that the State fund a long-term lease programme for low-income families as part of its measures to tackle the housing crisis.

In a document prepared after talks with Independent TDs and smaller parties on supporting it in government, Fine Gael floated the idea of a “cost rental” option being introduced for families to help keep rent levels manageable and avoid future increases.

The scheme, which was proposed by the National Economic and Social Council, would see the State fund accommodation at a low rent. The provider would then only charge a rent that is sufficient to cover current and capital costs. The costs would fall over time which would also allow the rent to fall. This would assist low-income families who do not qualify for social housing.

Fine Gael is also proposing a new “help-to-buy scheme” for first-time buyers. The party is also to examine introducing tax incentives for landlords who enter into long-term, secure leases with tenants.

The document, seen by The Irish Times, commits to overhauling the tenant purchase scheme to make it more attractive for social housing tenants. The proposals are to form part of a list of priorities being prepared by the party to be published next week.

The document also includes a pledge to publish a medium-term tax reform plan by July. This plan will be sent to the Oireachtas finance committee with a view to introducing it in this year's budget.

The document says existing tax rates are too high and discourage work and the provision of new jobs.

The plan proposes the removal of PAYE tax credits for high earners, higher excise duty on cigarettes, a new sugar tax and an increase in the minimum wage.

It commits to increasing the tax credit for the self-employed from €550 to €1,650 by 2018.

Acting Taoiseach Enda Kenny said he hoped the document could be ready ahead of the Dáil vote on electing a new taoiseach on Wednesday.

‘Serious business’

However, he insisted he could not give any indication on when a government may be formed.

“I don’t want to raise expectations here to be quite honest with you; the formation of government is a really serious business, we have been really serious about business with Independents and smaller parties over the past five days,” he said.

"I cannot give you the outcome of when this will be finalised but I hope to work and continue to work at it diligently and constructively . . . I do hope the Fianna Fáil party who said that they would be responsible in this matter will do so."

Mr Kenny said he had hoped to meet Fianna Fáil leader Micheál Martin this weekend but they had agreed to postpone their talks until Wednesday. He confirmed the party’s position was that it would not support a Fianna Fáil minority government.

Short timeframe

Speaking after their meeting with Fine Gael yesterday, the Independent Alliance insisted it was too early to decide who it would support in next week’s vote for taoiseach. Independent Alliance TD

Shane Ross

said the group of six TDs would discuss this on Wednesday but claimed it was too short a timeframe to decide.

A group of five rural TDs headed by former Fine Gael TD Denis Naughten said they would also discuss how to vote next week. Mr Naughten said it could not make a decision until they were aware of how negotiations with Fine Gael and Fianna Fáil would conclude.