Chancellor Alistair Darling believes the Government is "taking the right actions".
Homebuyers will not have to pay stamp duty on properties costing £175,000 or less for the next 12 months.
The current £125,000 threshold will be raised as part of a package of measures aimed at boosting the housing market.
Someone buying a home for £175,000 will save £1,750 under the scheme, which is likely to cost the Treasury £600m.
The government estimates half of all property transactions will now be exempt from stamp duty - up from one third when the threshold was £125,000.
'Do all we can'
Prime Minister Gordon Brown said the package of measures - including help for first-time buyers and families facing repossession - showed the government was taking action to help people through difficult times.
"Home owners need to know that we will do everything we can to keep the housing market moving," he told BBC News.
They are not going to help the vast majority of families facing a rising cost of living and falling house prices
But the Conservatives - who say they would scrap stamp duty for first-time buyers on properties worth £250,000 or less - said the measures were a short-term survival plan to keep Mr Brown in a job.
The government has not said how it will pay for the £600m estimated cost of the stamp duty move.
Chancellor Alistair Darling said he would reveal more details in his Autumn Pre-Budget Report.
He said the government was also considering ways of increasing the availability of mortgage finance.
But - in an echo of his weekend interview with The Guardian in which he said the economic downturn could be worse than previously thought - he said other factors would be crucial to the housing market's recovery.
First-time buyer Adam O'Neil benefitted from the changes
"We face a unique set of circumstances that we have not seen in generations, where you have a credit crunch and where you have high oil and food prices.
"But I remain optimistic, as I have said on many occasions before, that we can get through it.
"We will get through it and today's measures, helping the housing market, are one example of how the government can help people."
Other housing moves announced by the government include:
"Free" five year loans of up to 30% of a property's value for first time buyers of new homes in England
Extension of powers for councils and housing associations to be able to pay off debt for homeowners who can no longer afford mortgage payments and then charge rent.
Shortening from 39 weeks to 13 weeks the period before Income Support for Mortgage Interest is paid
Bringing forward spending from future years to encourage more social housing to be built
The funding for these measures, which unlike the stamp duty move will only apply in England, has been previously allocated and brought forward, the Treasury said.
Under the new loans system, called HomeBuy Direct, households in England earning less than £60,000 will be offered loans free of charge for five years on new properties, co-funded by the state and developers.
Once the five-year "free" period is up, homebuyers will be asked to pay a fee, the Department for Communities and Local Government said - although no more detail of this was provided.
In a statement, the DCLG said: "Not only will this [HomeBuy Direct] help first-time buyers... it will help the housebuilding industry weather difficult conditions."
This looks like a hotchpotch of measures thrown together to save Gordon Brown's political skin
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