'Second time buyers' were left out in the cold by the stamp duty relief for first time buyers brought in before the election last spring. Many bought apartments when single or childless and now would seek a bigger house with the arrival of children.

Construction industry figures told the Sunday Tribune the proposal was made in a face-to-face meeting between senior industry figures and finance minister Brian Cowen last Thursday.

It is understood, however, that Department of Finance officials are not in favour of the seven-year stamp duty exemption as currently presented, because those first-time buyers would not be required to dispose of their first property.

The industry figures said that the proposal was not intended as a loophole for investors and could be amended.

Some analysts said, however, that the more pressing issue related to stamp duty was the indexing of bands. Under current rules, house buyers pay a stamp duty rate based on the total amount. For example, a second-time buyer purchasing a house priced at 635,000 is assessed at 7.5% stamp duty, or 47,625. But the same buyer purchasing a house priced at 635,001 is assessed at 9% for the full price, or 57,150.09.

"Fixing the bands should be the first priority, " said the analyst. "It's the feature of the system that makes the least sense."

Figures released last week from the Permanent TSB/ESRI revealed that house prices had dropped 3.6% this year, but noted the figure could be greater because developers were now including additional fixtures and fittings such as kitchen appliances to entire buyers.