Rishi Sunak is reportedly preparing to extend the stamp duty holiday which is due to end next month until the end of June.
The chancellor will use his Budget on 3 March to move the tax break in order to bolster the property market as the UK recovers from the economic impact of lockdown.
The government made a vast majority of house buyers exempt from paying the tax on properties worth up to £500,000 until the end of March, allowing people to save up to £15,000 in tax.
It comes after the right-leaning Centre for Policy Studies (CPS) urged Mr Sunak not to end the stamp duty holiday.
A report by the centre said the tax break had increased house sales to their highest level since before the 2007 financial crisis.