Michael Howard yesterday unveiled the final plank of the Conservative Party's tax plans, saying he wanted to ease the burden of stamp duty on house purchases.

The Tory leader said he would raise the threshold at which the duty is paid to £250,000.

This would mean that more than 80 per cent of home purchases would no longer be subject to the tax.

The £1bn scheme follows previous announcements including £1.7bn to encourage pensions savings and £1.3bn to reduce council tax bills for pensioners.

Howard said the move would help "young people get on the property ladder".

The Institute for Fiscal Studies said the policy would be likely to push up house prices, though the National Association of Estate Agents said the government's recent decision to lift the threshold to £120,000 did not lead to higher prices.