Housing Minister Simon Coveney is coming under increased pressure to scrap the new help-to-buy scheme introduced as part of Budget 2017.

Sinn Féin today labelled the idea as "foolish", while the Fianna Fáil spokesperson on housing, Barry Cowen has called the scheme "blatantly unfair".

Under the scheme first time buyers will be able to avail of a tax rebate paid over a four year period.

The 5% rebate applies to new builds up to a maximum value of €400,000 – meaning the rebate could be worth as much as €20,000.

First-time-buyers purchasing a property worth up to €600,000 are also entitled to avail of the scheme, although the rebate will be capped at €20,000.

Speaking in the Dáil yesterday, Fianna Fáil spokesperson on housing Barry Cowen called the scheme a "mansion grant".

“A new home worth €600,000 would require a €98,000 deposit and an income of at least €145,000. This is four times the average industrial wage. A couple earning this when starting out in life does not need €20,000 from the State,” he said.

“It means ordinary taxpayers are directly subsidising people earning four times the average wage to buy a home worth three times the national average price of a three-bed semi-detached house.”

Minister Coveney defended the scheme, arguing that it will kick-start construction.

“I think actually what will happen now is that you will see a lot of first time buyers very frustrated and they will say, ‘there are not any new houses to buy, where are they?’” he said.

“The result of that, I hope, will be a response from the construction industry to say there is now not only demand but there is the capacity to buy  on the back of that demand and we need to get on and build ... Quickly.”

Sinn Féin's Eoin Ó Broin said Minister Coveney ignored the recommendations of a special all-party committee on housing when he introduced the new scheme.

The committee was set up after the election to look at ways of increasing building and lowering the cost of housing.

Deputy Ó Broin said the recommendations of the committee have now gone to waste.

"What we proposed back in June was [that] the housing unit [should] be given a task of doing an annual audit of the all-in cost of providing residential units,” he said.

"Unfortunately Minister Coveney ignored that piece of advice, and he has come up with a very foolish scheme and I think it is going to cause an awful lot of problems for an awful lot of first time buyers."

Deputy Ó Broin said the scheme is fundamentally flawed and will drive up house prices.