People who own a second property could be exempt from Capital Gains Tax (CGT) if they sell it to a tenant, a local authority or to an Approved Housing Body, under options the Government is likely to consider to boost housing supply.

The measure could form part of a budgetary package which will be aimed at helping tenants and landlords.

Senior Government figures have suggested the move could increase the number of homes available to renters.

Secondly, it could lead to more home ownership if a sitting tenant was able to purchase the property.

The option has been discussed but no decisions are likely to be made for some time.

The standard rate of CGT is 33% at present.

It comes after the announcement yesterday that the ban on evictions will not be extended beyond the end of this month due to concerns that an extension would damage the supply of rental properties in the long term.

Minister for Housing Darragh O'Brien defended the decision, saying it was done to avoid storing up further problems.

The Government, he said, was concerned that an extension of the ban would damage the supply of homes in the long term if more landlords left the rental market.

However, he conceded that the decision might lead to more people becoming homeless in the short term.

2,700 notices to quit were paused when the evictions ban was introduced, he said.

The minister confirmed that the Attorney General's advice noted the "significant risk" of a legal challenge if the ban was extended.

He said the decision was based on a number of factors, including the AG's advice.

Earlier, there were bitter exchanges in the Dáil as the impact of the Government decision not to extend the ban was debated.

Sinn Féin said this had caused enormous anxiety for renters and it accused the Government of "showing up" for wealthy investment funds but not for tenants.

Renters have no options and many will now have to emigrate to escape this nightmare, Sinn Féin leader Mary Lou McDonald told the Dáil.

The party is seeking a Dáil vote on the decision at the earliest opportunity with Ms McDonald saying "the stakes are so high".

The Taoiseach accused Sinn Féin of creating a false narrative and he said it was not a case of pitting landlords against tenants.

Leo Varadkar informed the house that more than 40,000 landlords had left the market in recent years and very few new ones had come in and that was why rents were high.

He said the Government would build more social housing and would endeavour to get 12,000 constructed this year.

More rental properties will be bought up by local authorities and there would be a further package in the budget for renters and landlords, he said.

This evening, the Taoiseach told Fine Gael parliamentary party colleagues that he believes there is a deficit of roughly 250,000 homes in the country.

Mr Varadkar said it will take a long time to close the gap but the corner can be turned this year.

He said there needs to be at least 40,000 homes built every year and this will be ramped up as pat of the Housing for All plan.

The Fine Gael leader said 35,000 homes are currently under various stages of construction.

The meeting heard 30,000 homes were built last year which did not include student accommodation and derelicts brought back into use.