The 80% windfall tax applying to profits generated through the sale of development land is to be abolished, according to Minister for Finance Michael Noonan.

Capital gains tax relief, which was introduced to increase property transactions, will also be removed from the start of next year.

In his Budget 2015 speech to the Dáil, Mr Noonan said first time buyers would be supported through a DIRT refund on savings used to purchase a home.

This relief will run until the end of 2017 and will be available to savings up to a maximum of 20% of the purchase price.

Mr Noonan said that first time buyers will be able to save for their first home and retain 100% of the interest they earn on their savings. He said he expected the banks will introduce specific savings products to support the new initiative,

In addition to this, Mr Noonan said that the Ireland Strategic Investment Fund is exploring ways to help boost the supply of homes, which could include investment funds for developers and investment in social housing projects.

A review will also be launched to see if the owners of zoned land were waiting for prices to rise further before they begin development.

If that proved to be the case, Mr Noonan said the Government would examine measures that would penalise those who do so.

However Mr Noonan also warned that the State could not return to a situation where tax incentives for developers drove supply.

"The Government is doing its part to overcome the challenges and remove the roadblocks to a fully functioning property market," he said. "It is up to the other stakeholders to follow suit."

Aside from measure to deal with development issues, Mr Noonan also said the Home Renovations Incentive scheme would be extended to rental properties, meaning landlords could avail of it before the end of 2015. 

€2.2bn investment in housing by 2017

The Government is to commit €2.2bn to social housing over the next three years, according to the Minister for Public Expenditure and Reform.

Addressing the Dáil on the expenditure side of Budget 2015, Mr Howlin said the majority of that - €1.5bn – will be invested directly by 2017.

This will deliver 2,500 extra housing units next year and more than 6,700 by 2017, he said.

A further €300m will be used in public private partnerships over the period, which would deliver 1,500 units by 2017.

These would not be the land swap deals “which so obviously failed several years ago”, Mr Howlin said, but would mirror the method used to develop new school buildings in recent years.

The remaining €400m will be provided by an “off-balance sheet financial vehicle” to approved housing bodies, which would include some of the proceeds of the Bord Gáis Energy sale.

Mr Howlin said the money would be used as leverage to attract investment from private bodies, as well as the likes of the European Investment Bank, and ultimately deliver 2,000 units between 2016 and 2018.

While the €2.2bn is set to be spent over a three year period, Mr Howlin said €800m would be allocated to the housing programme in 2015 alone.

Meanwhile, Mr Howlin said an additional €10m would be provided for the accommodation of homeless persons, bringing the budget for this to €55.5m per year.

The Construction Industry Federation has welcomed the Budget measures, specifically the increase in capital spending.

It said this would help turn the tide for the building sector.

"The increase in capital spending is very important to the construction industry," said CIF director general Tom Parlon, saying that public spending previously represented 50% of activity, before the significant cuts made in recent years.

Mr Parlon said the focus on social housing projects would provide a huge amount of work for the industry and “create thousands of jobs”.