The threshold for inheritance tax would rise from £300,000 to £1m under a Conservative government, George Osborne has told the party's conference.
Stamp duty for first-time buyers on homes worth up to £250,000 would be scrapped, the shadow chancellor added.
The cuts would be paid for with a fee charged to business people who register abroad for tax purposes.
The Lib Dems accused him of making "unfunded commitments", while Labour said his calculations were wrong.
Mr Osborne told the Conservative party conference in Blackpool that the £3.1bn cost of increasing the inheritance tax threshold and the £400m bill for scrapping stamp duty would be funded by imposing a £25,000-per-year charge for "non-domicile" taxpayers.
There are between 150,000 and 200,000 people who live in this country but who do not pay tax on the money they make abroad, he said.
Prime Minister Gordon Brown has been under pressure from his own party on tax breaks for wealthy "non-domicile" residents.
Mr Osborne said the inheritance tax change would benefit nine million families and ensure "only millionaires pay death duties".
He said his party wanted to help "people whose only crime in the eyes of the taxman is that instead of spending their savings on themselves they want to pass something on to their families".
Live in the UK and may even have UK citizenship
Have strong allegiance to their country of origin
Pay tax only on UK earnings, not on profits from businesses abroad
Not the same as non-residents, who have tax-free status if they do not exceed 89 days a year in UK
"The next Conservative government will raise the inheritance tax threshold to £1m. That means we will take the family home out of inheritance tax.
"In a Conservative Britain you will not be punished for working hard and saving hard."
Mr Osborne said he did not want to chase after income in the off-shore bank accounts of non-domiciles - but in return for that promise there would be a flat annual levy of "about £25,000" on those who register for non-domicile status.
He said extra money he raised from green taxes - in particular, aviation taxes - would go into what he calls a "family fund" to pay for tax cuts for families.
Mr Osborne conceded that the Tories had had their own period of appearing to be out of touch with the modern world, of not understanding the concept of civil partnerships or that many women want both careers and families.
IHT is a form of death duty on estates valued at more than £300,000
Above that threshold they are taxed at 40%
About 40,000 estates a year are subject to IHT
It includes the value of a house - unless it is left to a UK-domiciled spouse
Assets given away in the seven years before death subject to IHT
"But thanks to David Cameron, we've worked hard to change our party. Now we are the champions of modern Britain," he said.
Later, Chancellor Alistair Darling told the BBC that 96% of estates paid no inheritance tax.
He said the £25,000 levy would raise only a fraction of the £3.5bn needed and said Mr Osborne had "inflated" the number of non-domicile people.
"Yet again, this is an example of where the Tories are making promises on tax which they can't afford to pay for," he said.
"He is making a promise he hasn't got the money to pay for.
"If you do that, you create the very instability which is the last thing the economy needs and people in this country would pay for that."
And Lib Dem Treasury spokesman Vince Cable added: "Any expectation that the Conservatives had a radical and meaningful plan for fairer taxes has been blown out of the water with this utterly feeble set of half promises and unfunded commitments."
But Mr Osborne told the BBC the government had been "panicked" by the announcement, adding: "They know people are angry at being sucked into Gordon Brown's inheritance tax net. They know that they have not done anything on non-domiciles."
The Tories are using their week in Blackpool to unveil the key policies on which they will fight Labour.
A flurry of announcements over the past few days has included giving tax breaks to some couples with children and the introduction of a new airline pollution tax.
The party has also said it would axe Home Information Packs and end "garden grabbing" by developers by changing planning rules.
And there are also proposals for a crackdown on the compensation culture which Conservatives say threatens school trips and adventure holidays.