Chancellor Rishi Sunak is expected to announce plans for a temporary stamp duty holiday that could save the average English homebuyer £6,915.
Analysis by Savills estate agency found the move would make 88pc of property transactions exempt from the tax.
Mr Sunak has drawn up plans to boost housing transactions in the wake of coronavirus by raising the threshold at which buyers start paying tax on their purchases from £125,000 to as much as £500,000.
If the nil-rate band was raised to £500,000, the average buyer across England would save £6,915 in stamp duty, while buyers in London would save £15,000, Savills found.
The changes, designed to counteract the plunge in sales caused by lockdown, are expected to come into effect in the Autumn Budget and could last for as long as a year.
Mr Sunak’s measures would apply to buyers in England and Northern Ireland, but not in Wales and Scotland, which have separate transaction tax systems.
Under the proposals, some regions with the most affordable property would become almost completely stamp duty-free. But it will be the most expensive parts of the country that receive the biggest boosts, as where prices are higher, savings will be bigger.
Currently, buyers in England and Northern Ireland pay no tax on the first £125,000 of a property. After the nil-rate band, they pay a 2pc rate on the next £125,000 and 5pc on the next £675,000. In the top band, where the value exceeds £1.5m, they pay 12pc.
The new measures would mean practically no buyer in the North East would pay any stamp duty at all. In the year to May 2019, 99pc of all transactions here were below £500,000, Savills found.
Similarly, in Yorkshire & the Humber, the North West and the East Midlands, the share was just 97pc.
Three English local authorities which last year had no recorded transactions over £500,000, would become completely stamp duty-free: Kingston-upon-Hull, Barrow-in-Furness and Copeland.
In regions where property prices are lower, the tax savings would also be minimal, as there are few homes that meet the higher tax bands.
In the North East, where the median house price is below the current nil-rate band, the average buyer already pays no stamp duty, according to property website Zoopla.
In Yorkshire & the Humber, the North West and the East Midlands, the respective savings would be just £506, £580, and £1,204, Zoopla found.
The proposed changes will also make little difference to most trying to get onto the property ladder.
First-time buyers already have an exemption up to the first £300,000, and then pay only 5pc on the portion up to £500,000. (If the value of the home they are buying exceeds £500,000, they lose their exemption altogether.)
Lawrence Bowles, of Savills, said: “What this won’t do is help first-time buyers, especially outside London. They already have stamp duty relief, so many will go from paying zero stamp duty to zero stamp duty.”
Most first-time buyers would make no savings under the current proposals. The average first-time purchaser spends £223,393 on a home, which is within the first-time buyer exemption band of £300,000.
First-time buyers in London, however, would save on average £7,342 in stamp duty, said Savills. Here, the median purchase price of a first home is £446,839.
The measures would spur activity in higher price brackets – particularly among downsizers – which will have significant implications for the entire chain.
Estate agents have been calling for stamp duty cuts since the charges were raised for higher priced homes in 2014, and the Government has continually toyed with the idea.
But now many in the sector are criticising Mr Sunak for trailing the plans before they are formally announced, and for leaving a window before the holiday is brought in. Buyers could stall their transactions while they wait to hear if they can get a tax discount.
“Timing could be an issue,” said Mr Bowles. “It could potentially slow down the pace of recovery.”
The holiday would come into effect at the moment analysts are expecting the economic impact of coronavirus to hit the property market hard. Both mortgage holidays and the furlough scheme are due to end in the autumn, meaning there could be a spike in forced sellers, and a fall in the number of people able to purchase.
“Stamp duty is very important when the mortgage market is functioning well,” said Mr Bowles. But if buyers are not able to get mortgages because they are unemployed or lending restrictions have tightened, tax cuts will make less difference, he said.
The other measures to boost the economy that will be announced on Wednesday “will have just as much impact on the property market as a stamp duty holiday,” added Mr Bowles.