A Labour government would abolish stamp duty for first-time buyers when buying property worth less than £300,000, Ed Miliband will say today.
In the latest of a number of policy announcements by the major parties to deal with the UK's housing crisis ahead of the election, Miliband will pledge to do more to help young people on to the housing ladder by scrapping the tax.
Labour says the £225 million pledge – which will be funded by "tackling tax avoidance by landlords" - will see 90% of first-time buyers save up to £5,000.
Miliband will say: "There's nothing more British than the dream of home ownership, starting out in a place of your own. But for so many young people today that dream is fading with more people than ever renting when they want to buy, new properties being snapped up before local people get a look-in, young families wondering if this country will ever work for them.
"That is the condition of Britain today, a modern housing crisis which only a Labour government will tackle."
Stamp duty works on a sliding scale. Buyers currently pay nothing on the first £125,000 of a property's value and are then charged a rate of 2% on the next £125,000, 5% on the next £675,000, 10% on the next £575,000 and 12% on homes over £1.5 million.
In response to the news, Mark Hayward, director of the National Association of Estate Agents said: "This could be a real vote swinger for those looking to step on the housing ladder.
"Scrapping stamp duty for homes under the price of £300,000 would only mean good things for hopeful first time buyers (FTBs). For many, hidden costs such as stamp duty can be the difference between being able to afford a home, and not being able to afford one.
"Our recent research showed that just under a third of house sales were made to first time buyers, and hopefully we'll see this significantly increase over the next three years."
In addition, Miliband is expected to announce a further proposal that would give buyers that have lived in an area for more than three years the first choice of up to half the homes that are being built there, while over the weekend it pledged to reform the rental market by introducing standard three-year tenancies for tenants with rent rises capped at the rate of inflation too.
Meanwhile, the Conservatives have already announced a number of housing polices ahead of 7 May, including extending Right to Buy to 1.3 million housing association tenants in England and introducing a new 'Help to Buy Isa' for first time buyers which will see the government contribute a maximum of £3,000 to a deposit.
The Tories have also pledged to build 200,000 homes for first-time buyers aged under 40 at a 20% discount, while Labour want to build 200,000 new homes a year by the end of the next Parliament.