The Government is set to increase the €500 credit for renters and introduce a tax concession for small landlords in next month's Budget.

Minister of State Kieran O'Donnell said the coalition is now finalising the details of the measures.

The thinking within Government is that this combined approach will cut renters' costs and keep more landlords in the market, as well as encouraging new ones to rent out properties.

If it works, it would lead to more homes becoming available for renters.

Minister O'Donnell said the change could see landlords offered further tax relief on their earnings.

Taoiseach Leo Varadkar has indicated that tenants' rights would also have to be strengthened.

Sinn Féin housing spokesperson Eoin Ó Broin said rents are too high and rising.

He called for a Budget ban on rent increases for three years, along with a credit worth a month's rent for every private renter.

He believes tax breaks for landlords will do nothing to tackle the deepening housing crisis.

While University of Limerick economist Stephen Kinsella described any move towards tax credits for landlords as a mistake, adding that it would not help solve the housing crisis.