Gordon Brown is considering plans to temporarily scrap stamp duty, Sky News has been told.
It is one of a number of proposals put forward to boost the faltering UK economy.
The Prime Minister is reportedly also looking at ways of reducing fuel costs.
Apparently the plan is to suspend stamp duty for a limited period on all house purchases.
At present this varies from one percent on homes between £125,001 and £250,000 to four percent on properties over £500,000.
Ministers believe stamp duty is putting people off buying new homes and contributing to the decline in the housing market.
Sky News political correspondent Niall Paterson says it has been under consideration for some time.
"Private conversations with the Treasury some time ago led me to believe that there could be a scrapping of the 1% rate for property valued at less than £250,000," he writes in his blog.
"This morning they've confirmed that they are indeed considering a stamp duty 'holiday'... but that the plans remain firmly on the drawing board."
Paterson says other options have also been discussed, including special ISAs for first time buyers.
Chancellor Alistair Darling has indicated stamp duty could well be suspended for a while.
Questioned about the possibility, he said: "I am looking at a number of measures.
"It is helping people that is important. I want to look at a range of options that will help people."
Source:http://uk.biz.yahoo.com/05082008/140/stamp-duty-suspended.html
