Chancellor Rishi Sunak is preparing to extend the stamp duty holiday by three months until the end of June.
The move, reported in today’s Times, would attempt to boost activity in the housing market as the country emerges from lockdown.
An extension would cover sales of properties worth up £500,000 and could cost the government £1bn.
Britain raised the threshold of property tax to £500,000 last July from £125,000, exempting nine of 10 house buyers from stamp duty.
The temporary cuts are set to expire in March, but Sunak is expected to use his annual budget to move the policy to the end of June.
This will bring it in line with the easing of lockdown restrictions.
Sunak will also announce plans to raise corporation tax and set out job support measures at next week’s budget.
Official figures last week showed unemployment had risen to its highest since early 2016.