Stamp duty should be scrapped for all homes worth less than £500,000, according to the Free Enterprise Group of Conservative MPs.
It is lobbying Chancellor George Osborne to include the move in a package of tax cuts in his autumn statement, to help Britain's squeezed middle classes.
This unpopular tax has recently been targeted by the Stamp Out Stamp Duty campaign, which claimed the tax makes it harder for buyers to get on the property ladder or trade up to a larger home.
HM Revenue & Customs now makes £800 million every month from stamp duty.
The Free Enterprise Group said Osborne needs to do much more to help those on middle incomes who have faced a severe financial squeeze during the recession.
It claims the UK has the highest property taxes in the world, and that scrapping stamp duty on properties worth less than £500,000 would help first-time buyers much more than any other measure.
Some 94% of homes sold in England now attract stamp duty.
Buyers of properties worth more than £250,000 pay 3% duty on the total price. But if the threshold had been increased in line with prices it would now stand at more than £1.2 million.
As well as scrapping stamp duty on most homes, the group is also expected to recommend raising the rate at which people start paying 40% income tax and cutting business rates to save the embattled high street.
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