"We are very pleased to hear that it is being considered, " said the Construction Industry Federation's head of public affairs Martin Whelan, who said that the federation had long believed that something needed to be done to address imbalances in regional development.

"If there are market impediments to achieving [the spatial strategy], then the state should look at incentives. The examples of the IFSC and the Ballymun Regeneration Project indicate that incentives do work, " Whelan said. He added that the CIF, which has advocated the introduction of such tax measures in the last month, believed that any incentives should be managed at a local authority level, since they were best positioned to identify needs on the ground.

Mary-Kate McGarry, an economist at estate agent Savilles HOK, welcomed the proposed incentives and said they had proved tremendously popular in the past and would provide a kick-start to development at a regional level.

"Regional hubs will benefit from the development and it's good to see that they are looking at the big picture by tying it into the spatial strategy, " she said.

McGarry said tax incentives could also serve to promote the residential property market, given its current slowdown. "A slowdown doesn't mean a standstill or a halt and demand is still there, " she added.

Minister for finance Brian Cowen said in his last Budget speech that he had abolished many propertybased tax relief schemes as part of reform measures to ensure a fairer tax system.

The department of finance denied that the minister had now made a uturn in policy. A spokesman for the department said the minister had given himself some leeway be saying he would continue to assess the role of time-limited schemes only, as recommended by a review he had commissioned.