IIB Bank's chief economist is warning Minister for Finance Brian Cowen not to make any dramatic changes to the stamp-duty regime in next week's Budget.
The Government currently takes in almost €3.5bn from the tax every year.
Mr Cowen is coming under increasing pressure to reduce the duty for first-time buyers in order to ease the huge cost involved in buying a house.
However, IIB Bank's Austin Hughes says this could actually push up house prices as buyers would probably use the money saved to pay more for the house in the first place.
"Unless there is a greater supply of housing, the likelihood is that they will bid against each other and the price of houses will increase," he says.
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