The Government has been urged to set up an immediate review of the amount of tax paid by investment property groups here amid fears they are paying next to nothing to the State.

Fianna Fáil housing spokesman, Darragh O'Brien, demanded the move after warning hard-pressed families are being squeezed out of the property market by investment firms.

Mr O'Brien said he is deeply concerned about the rise of "cuckoo funds", the name used to describe foreign property investment firms which purchase houses in Ireland before ramping up rental costs.

Hitting out at the situation, the opposition housing spokesman said his party will formally ask Finance Minister Paschal Donohoe to begin a tax review of the firms to find out if they are using any "loopholes" to target the Irish market.

Mr O'Brien said:

"We're calling for a full review of the tax treatment of these cuckoo funds. These funds were invited into this country and institutional investors by the Government, but we want to know why is it so advantageous for them to come in and buy full developments and homes and rent out to the market at extortionate rents.

"We will be formally writing now to the minister to look for a full, formal review and an examination of the impact these funds are having on the market. People are paying extortionate rents in Ireland, and again this points to a failed policy," .

The Fianna Fáil housing spokesman said that while any system designed to allow property firms to pay low taxes is an issue, the bigger problem is the knock-on effect such a situation will have on first-time buyers unable to find a home.

Noting housing market figures released last week by Savills, Mr O'Brien said "the impact of cuckoo funds" means that "first-time buyers are being squeezed out of the market, by investors on the one hand and by the State on the other".

"I think we need to see a full review of the tax payments [from cuckoo funds], we need to look under the bonnet on this," he said.

In a separate media briefing, Labour leader Brendan Howlin said he is growing increasingly concerned about the cost of living in Ireland's major cities and the inability of people to buy homes.

Citing a case he was told about in recent days, Mr Howlin said he is aware of one person who works in Cork city but is unable to live in Ireland's second capital due to costs - meaning he is instead travelling from Dunmanway in West Cork.

His party colleague, Labour's housing spokeswoman, Jan O'Sullivan, said she is equally worried about the Government's failure to address spiralling rental costs as part of the rent pressure zone system.

Ms O'Sullivan said that while the system works to an extent without rent pressure zones, it almost guarantees that landlords operating just outside the zones will ramp up their prices.

Pointing to one example she has been made aware of in her constituency in Limerick, Ms O'Sullivan said some landlords just outside the zones are raising their rents by as much as 30% and called for fresh action from Government on the issue.