The enhanced Help to Buy scheme may be extended into the new year to encourage more first-time buyers to buy new homes.
The scheme, which allows home buyers claim back up to €30,000 in tax from the cost of a new house, was due to end in December.
However, it is now expected to be extended into the new year at the enhanced rate introduced as part of the July economic stimulus package.
It is unclear how long the scheme will be extended for, but a Government source said it is central to Fianna Fáil's Budget demands.
Housing Minister Darragh O'Brien has held meetings with Finance Minister Paschal Donohoe about extending the first-time buyer incentive and keeping the €30,000 tax-back limit in place for the coming months.
Mr O'Brien wants the incentive to be extended until he can introduce a new affordable housing scheme, which will be announced in the Budget but will not be accessible until later in the new year.Relief
In the July stimulus package the maximum tax relief allowed under the scheme was increased from €20,000 to €30,000 until December 31.
The expansion of the scheme meant house buyers can claim tax back on 10pc rather than 5pc of the price of a new house capped at €500,000.
"Darragh is pushing for it to be extended to fill the gap until his affordable house scheme is up and running," said a Government source.
"It's a good scheme and it does a lot of things because it creates construction activity, it protects jobs and helps people get their first home."
A Department of Finance source said that there was "no decision yet".
Mr O'Brien received Cabinet clearance to prepare his affordable housing scheme this week.
The minister is proposing that the new scheme, which is aimed at young professionals, will impose no salary cap for those seeking to buy a new home.
Under the scheme, a percentage of the cost of a new home will be bought by the Government. It can then be bought back later by the homeowner.Stake
They will not be required to pay back the State's stake until five years after they buy the home.
It has yet to be decided if homeowners will have to pay interest when buying out the State's part of the house, although a source said it will be either "low or no interest".
Meanwhile, Mr Donohoe signalled the Employment Wage Subsidy Scheme (EWSS) will have to be reduced if it is to be extended beyond the end of March.
It came as he briefed TDs at the Dáil's Budgetary Oversight Committee on supports for older people and workers hit by Covid-19.
The Finance Minister kept his cards close to his chest, offering few specifics during an appearance at the committee.
Mr Donohoe said people at risk of fuel poverty as Carbon Tax is hiked will be protected as he also confirmed there will be no wealth tax in the Budget.
Instead, he set out the strategy he will pursue in a Budget that will prepare for the daunting prospect that Covid-19 will be with us throughout all of 2021 while the country is dealing with the fall-out from a possible no-trade deal Brexit.