Finance Minister Brian Cowen said the reform of stamp duty announced in yesterday's Budget was aimed at maintaining confidence in the Irish economy.
Speaking on the Today with Pat Kenny radio programme, Brian Cowen said he had looked at developments in the market over recent months in coming to his decision.
He said that the housing market will continue to correct due to overcapacity and reforms to property tax will provide a sense of clarity and but are not the panacea.
'At the moment there is an overhang in the market, there was record output way beyond what was required, and now the market is correcting itself and that will continue,' he said.
Mr Cowen said rising interest rates and the global credit crisis had exacerbated an inevitable cooling after a decade-long property boom during which house prices quadrupled and he had therefore decided to reform stamp duty paid by home buyers.
'Myself and senior civil servants came up with a counter-cyclical measure that is simply a confidence building measure. It is not a panacea but it does provide people with a sense of direction and certainty,' he said.
