The Taoiseach has said the State will pay for the infrastructure associated with building new homes, and that taking the cost away from developers will also mean it does not fall on the buyer.
Speaking in Ostend, Mr Varadkar said the plans being put to Cabinet tomorrow will cost "hundreds of millions of euro", but rejected the notion that they represented a gift to developers.
He said: "I absolutely know it will be misrepresented that way…, [but] I totally reject that presentation.
"What we're saying is that infrastructure, like connecting a new housing estate, or a new apartment block, to water, to the road network, to the footpath network…that is social infrastructure.
"What we're doing is we're socialising the cost of that…as it actually used to be in the past. At the moment, development levies fall on the developer, and ultimately fall on the person buying the new home. We're changing that now so for the next couple of years, the Government, the public taxpayer, will cover the cost of that public infrastructure."
The Taoiseach said the Government's housing strategy was working, with more social housing being developed than any time since the 1970s.
He said up to 400 first-time buyers were buying their first home every week. "We haven't seen that since the Celtic Tiger period."
Mr Varadkar conceded building was "not happening fast enough" and that the state needed to catch up on the housing deficit.
"The package that you're going to see tomorrow is all about accelerating the supply of new housing, reducing the cost of building houses, and financing affordable apartments. It will cost hundreds of millions of euros."
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Savings to be gained from the abolishment of the development levy will vary depending on where the construction takes place.
The amount at which such levies are charged is determined by individual local authorities.
In the Dublin City Council area, for example, a levy of €113.82 per square metre applies to residential developments, meaning thousands of euro could potentially be saved.
The levy contributes towards the provision of public infrastructure to facilitate construction.
Also included in the plans to be brought to Cabinet tomorrow is a proposal to increase the grants available to renovate vacant homes.
The measure is designed to address the rising cost of building materials.
The grant scheme is set to be expanded to include homes which were built before 2007. At the moment, it only applies to homes built before 1993
Property owners can qualify for a grant of €30,000 to refurbish a vacant home, but if it is derelict, a grant of up to €50,000 is available.
It comes as Taoiseach Leo Varadkar signalled that the Government will look at financing the building of apartments where tenants would be offered affordable rents.
''Government is panicking'
Sinn Féin leader Mary Lou McDonald said a massive scaling up in the delivery of affordable housing and social housing is needed.
"What we have is a Government who still don't appreciate, much less respond to the scale of that challenge.
"So, we'll see what they bring forward tomorrow. I mean, the test of all of this will be whether or not housing becomes affordable, whether or not housing becomes available, and I for one have seen nothing so far to suggest the kind of step change that's needed at this time.
"I see a Government that is now, I think, panicking because time is running out for them. I see them tinkering around the edges but not addressing the central and fundamental issue, which is much higher scale delivery of affordable housing and socialising housing."
Additional reporting: Tommy Meskill
