Proposals to exempt modular homes in back gardens from planning permission are expected to be approved by Cabinet when it meets at Government Buildings this morning.

The plans, first mooted last year, have been criticised by some planning experts but the Government insists that they can make a contribution to easing the housing crisis by supplying a new class of accommodation quickly.

The planning exemptions for modular homes in back gardens will be subject to some requirements, including the size of the garden – at least 25sq m (269sq ft) – and meeting building standards. Only owner occupiers will be allowed to construct such homes, while separate entrances and a minimum distance between the modular home and the main house will also be required.

Significantly, it is planned that the rent-a-room tax exemption will be extended to the back garden homes – meaning that the owner of the principal house will be able to charge rent of up to €14,000 a year tax free.

On his way into Government Buildings for this morning’s Cabinet meeting, Tánaiste and Minister for Finance Simon Harris said the plan would be a “positive” measure.

“I think it’s important that we take the planner out of the back garden, and that we enable planners to be freed up to work on critical infrastructure, to work on major housing developments, and provide people in this country with a degree of flexibility around what they choose to do with their own garden,” he said.

“Obviously, they’ve got to operate within regulations, building standards and the likes, but I think this is a positive measure in a housing emergency, but also I think it’s a positive planning reform measure too.”

He added: “There is a housing emergency, and we have to, and I believe this instinctively, we have to remove bureaucracy and administration and red tape and make it as easy as possible for people to be able to have homes, have shelters, use their own garden space as well.

[ Agreement in principle on plan to allow tax-free rental of back garden cabinsOpens in new window ]

“But it is also important we look at this and keep it under tight review. So built into the proposal today will be a review within 18 months and I think that is important.”

Taoiseach Micheál Martin said there were “very serious challenges in housing”, including in the provision of rental accommodation.

“This is just an added layer of potential supply to the market, which is very, very important,” he said at Government Buildings. “We have to pull out all the stops to deal with housing because the younger generation need access, and anything that takes pressure off the rental market is a positive in my view.

“I think there’s a broader conversation about rental protections and tenancy protections for people who are in a licensed agreement outside the traditional tenancy agreement. That’s not a reason not to go ahead with this and people have been waiting a long time for this.”

Speaking on the way into Cabinet on Tuesday morning, Minister for Housing James Browne said the proposal would be reviewed within 18 months.

Asked about whether there were figures on how many units they expected to be built under this exemption, Mr Browne said: “It’s about simplification, it’s not about trying to extrapolate how many there’s going to be.”

He said the units would not be included in the Government’s yearly housing figures.

Sinn Féin housing spokesman Eoin Ó Broin criticised the plan.

He said that the plans were “potentially very problematic”, and pointed out that when the plans were first suggested last year, it was intended that the back garden units would be for family members only. Now, he said, it appeared they would be rented out, though he questioned what tenant protections occupiers would have.

He also warned of a return to “very poor quality” accommodation through the scheme.