Taoiseach Micheál Martin has said that he does not think there is an appetite in Government to reduce the threshold at which people pay inheritance tax on family homes.
It comes as proposals from the Commission on Taxation and Welfare, first reported by the Irish Independent and due to be published by the Minister for Finance Paschal Donohoe on Wednesday, call for significant changes to the future of the tax system, including inheritance tax.
A Department of Finance spokesperson said any proposals that come from the commission will be aimed at long-term changes and future budgets, not just Budget 2023.
Under Capital Acquisition Tax rules, a child can inherit €335,000 from their parents before they pay tax at 33%.
Just over a decade ago, a total of €542,544 could be inherited or gifted before paying tax at 22%.
While the commission did not put a new threshold or rate on what should be taxed, it was reported that the reduction in the threshold should be "substantial".
Speaking on RTÉ's Today with Claire Byrne, Minister of State for Overseas Development and Diaspora Colm Brophy said he believes that people should be allowed inherit their family home without paying tax.
If it is a multi-million euro property then maybe there should be a small amount of tax, he said, but a regular house should not be taxed.
He acknowledged that the tax system does need to be changed but "picking on people who inherit the family home that their parents have already paid tax on is wrong".
He added that he would be in favour of increasing the amount that people can inherit.
On the same programme, Labour Party Senator Marie Sherlock said the discussion around inheritance tax is taking place because a better tax system is needed here.
She acknowledged that this is an emotional issue, but said the reality is that people who inherit anything are in a privileged position, adding that there should be a radical reduction in the tax threshold and also the rate.
She said that without radical change, there will be "permanent cost-of-living crises for years".
The commission is also set to recommend that the market value of a farm should be reduced to 80% when assessing inheritance tax.
Ms Sherlock said a greater understanding of who is inheriting farms and the value they are inheriting is needed.
Meanwhile, members of Fine Gael's Finance Committee have expressed their opposition to the proposal, describing an increase in inheritance tax as "an attack on working families".
Fine Gael deputies Neale Richmond, Bernard Durkan and Senator Maria Byrne said a change such as tax-free threshold for inheritance tax being lowered in future years would be "completely unfair".
"People who work all their lives to put a home over their heads and provide for their family should not be punished for their hard work when they wish, at the time of their choosing or indeed their passing, to provide their children with something to help secure their future," the politicians said in a statement.
"If anything, those who have paid so much in taxes and provided so much for their families should be rewarded and not punished. We are calling for this to be the position in Budget 2023 and taxes are cut and not added to".
Mr Richmond, Mr Durkan and Ms Byrne said the commission should not be proposing to penalise working families.
"Young people across Ireland are following in the footsteps of their parents and are working hard to provide for their future, their families and homes of their own. Parents should not have to worry about their children paying this tax."
