The section 50 tax break for student housing is to be phased out, the Department of Finance has confirmed.
The Union of Students in Ireland (USI) had called for an extension of the scheme amid fears that "properties presently classified as Section 50 student accommodation will move into the open market and their rents will soar to open market levels".
The USI claimed that up to 20,000 young people could face eviction and be pressured into student "shantytowns" when a low-rent housing scheme expires.
But the Department of finance, as part of a full review of all tax incentives, expects "that the vast majority of the accommodation provided will revert to college authorities at the end of the 10 year period for which the incentive applies, as investors sell to college authorities, who will continue to rent to students as part of an integrated residential campus strategy".
It added that the Section 50 scheme has come at a high cost to the Exchequer - €159 million from 1999 to 2005. Since the institution of the incentive in 1999, 15,000 new bedspaces have been created.
The review also warns of an oversupply opf student housing as a result of the tax break.
The Department expects that the scheme will not start to run out until early 2010 and in some cases may continue till 2018.