Gordon Brown has unveiled plans to boost the supply of affordable homes and the amenities that go with them.
The chancellor wants one million new homeowners by 2010
New planning guidelines will encourage local authorities to accelerate planning consent and bring forward development of brown field sites.
The chancellor launched a consultation on a new "planning gain supplement", a windfall tax on the profits made from selling land for property development.
The money raised would be used to build roads, schools and other amenities.
In his pre-Budget report to the House of Commons, Mr Brown said it would enable local authorities to "convert new estates into genuine towns".
He said that over the next decade, there would be a 200,000 net increase in the number of homes each year, compared to around 150,000 currently.
The plans are a response to Kate Barker's independent review of housing supply, commissioned by the government in 2003, which showed that more people were being locked out of the property market.
To meet the new housing targets, the Office of the Deputy Prime Minister has published new draft planning guidelines to ensure that local authorities release more land to meet future requirements.
The government also committed itself to a 50% increase in funding for social housing, aimed at delivering an extra 10,000 homes a year by 2007.
The Campaign for More and Better Homes welcomed the proposals for building new homes, but said they needed to be underpinned by investment in the necessary transport links, schools and other amenities.
"We now look to the chancellor to clearly set out how and when this will be paid for," said spokesman Mark Titterington.
"Otherwise the public won't support more homes being built and today's reforms will never get off the drawing board."
But property firms were alarmed at the prospect of another land tax in the form of the 'planning gain supplement'.
A new tax could make developers pay for local roads and amenities
"This is the fourth attempt at a land tax since 1947, all the others failed," said Faraz Baber, a director at the British Property Federation (BPF).
He said his members would be in favour of the tax raising more money for investment in local infrastructure, but said they would be worried about how a development could be valued for tax purposes before it was even built.
"And they won't be happy with the idea of yet another government department (HM Revenue & Customs) getting involved in the planning process," he said.
Together with the Royal Institute of Chartered Surveyors, the BPF said it would prefer the new tax to be a tariff.
This would involve a local authority drawing up a budget for local infrastructure spending and then funding it by charging a tariff for developments - for example a set fee per new house, or per square foot of the new property.