The Transport Minister Leo Varadkar has said the Property Tax is a good idea.
Mr Varadkar confirmed today that the Cabinet has reached an agreement on the Budget, after meeting in private last night.
He would not go into the details of the cuts and taxes decided upon by the Coalition, but he did say that a Property Tax is a preferable means of raising revenue compared to unpalatable income tax hikes.
It is believed the tax will be based on 0.2% of the value of the house.
Mr Varadkar said the country would not be in the mess it is in financially, if the tax was imposed during the boom.
He said: "From a policy point of view, and this is a difficult thing to say and I know people won't like to hear it and it is coming at the worst time possibly imaginable, but property taxes are a good idea.
"If we had maintained our property taxes throughout the boom period, not only would it have given us a steady stream of revenue, unlike Stamp Duty which can be totally erratic - it can be huge one year and terrible the next year - it also would have helped to have contained the increase in property prices and we wouldn't be in the mess we are in now."
Meanwhile, Dublin Chamber of Commerce is calling on the Government not to introduce the Property Tax based on a percentage of a home's value.
Policy and Communications Manager, Patrick King, believes the anticipated tax on a property's value is a 'Dublin Tax'.
Mr King said: "Dublin Chamber of Commerce is fearful that what this tax will do, it will end up being a 'Dublin Tax' really.
"We have seen this before in the 1980s to the 90s that a property tax was put in place, and it basically became just a Dublin Tax because of the way it was structured."