Pinning tax allowances and thresholds to purely inflationary increases - so that they do not rise in line with salaries and, especially, house prices - has drawn more and more taxpayers into new and higher tax bands, generating millions of pounds in additional taxation.
Figures show that fiscal policy has left homeowners more than 10 billion a year worse off than they were in 1994.
Just 12 years ago, homeowners were net beneficiaries of the government to the tune of 2.6bn, largely through tax relief on mortgage interest payments.
By 2004-5, however, tax relief on mortgage interest had been abolished and the amount homeowners paid in stamp duty and inheritance tax (IHT) had risen so steeply it dwarfed the amount they received in income support by 7.5bn.
The newly published UK Housing Review 2005-6, released jointly by the Council of Mortgage Lenders (CML) and Chartered Institute of Housing, analyses gross tax paid on residential property since 1991.
Author Steve Wilcox, of the Centre for Housing Policy at the York University, concludes that stamp duty and IHT payments are growing faster than the amount the government would take if it levied capital gains tax on housing wealth.
In 2004-5 alone - the most recent year for which Inland Revenue data is available - the amount paid by homeowners in stamp duty and IHT grew by almost 2bn or 41 per cent.
The scale of the impact of these so-called "stealth" taxes is startling. Typical middle-to-high income earners now pay up to 50 per cent of their incomes to the Treasury by way of taxes, compared with 36 per cent in 1996. And, since 1997, revenue generated by stealth taxes, fiscal drag and stamp duty has increased a staggering 78 per cent - to 123bn today from 69bn.
One of the most dramatic increases can be seen in stamp duty land tax on house sales: revenue here has risen from just 675 million in 1996 to 5.5bn in 2004 - a more than eightfold increase. That is placing a huge burden particularly on first-time buyers, for whom housing affordability is a "major constraint", says the CML, despite a doubling of the stamp duty threshold to 120,000 last year.
It believes this month's Budget represents an ideal opportunity for the Chancellor to reverse the spiralling growth of tax on home-ownership. "Current tax policy sits oddly alongside the government's stated objective of extending home-ownership to two-thirds of the population," says Bernard Clarke, editor of the CML's latest newsletter.
"Although the Chancellor did raise the stamp duty threshold last year, that only reduced the annual tax bill for homeowners by around 250m. Without a continuing commitment to increase the threshold in line with inflation, the value of last year's concession will shrink."
The modest 6.5 per cent reduction in stamp duty payments arising from the increased threshold would reduce as the number of homes sold for less than 120,000 declines. Indexing the thresholds would, over time, give more people the chance to build up their own source of wealth in property and reduce dependence on government help, it says.
Soaring house prices have also created an inheritance tax bonanza for the government. They have contributed to an 81 per cent increase in IHT revenue - to 2.9bn from 1.6bn in the past eight years.
That has been driven by a surge in the IHT take on property, which has risen 129 per cent since Labour came to power in 1997 - to 1.1bn from 480m.
That is largely attributable to the failure to index allowances in line with house-price inflation. If the 1997 IHT threshold of 215,000 had been increased to reflect house-price inflation, it would now stand at more than 500,000, instead of its current level of 275,000.
"One of the iniquities of inheritance tax is that the government is taxing growing numbers of home-owners at 40 per cent when they die, even when they have never been higher-rate tax-payers during their lifetime," adds Bob Pannell, the CML's head of research.
Without a change in policy, there is likely to be a further dramatic rise in the number of estates liable for IHT. Since 2000, the value of residential property in estates worth more than 200,000 has trebled from less than 4bn to about 12bn. And estimates suggest that the number of people potentially liable for IHT could rise by two-thirds to 3.6 million by 2009.
Ronnie Ludwig, a partner at Saffery Champness in Edinburgh, says: "Looking forward 15 or 20 years, as the gap widens further between the inheritance tax exempt threshold and house values, the figures are staggering.
"A difference of only a few percentage points between the two, especially when compounded over a ten-year period, makes for a very disturbing scenario."
Yet, under current legislation it is notoriously difficult to mitigate IHT on your principal residence - for most families, their major asset.
The take from other forms of taxation is also soaring: capital gains tax, for example, has more than doubled to 2.3bn from 1.1bn over eight years.
Money is flowing into Revenue coffers from more surprising areas, too: more than a quarter of everyday motoring costs go to the government through a variety of taxes.
Car maintenance firm motoreasy.com says 27 per cent of the money spent on running a car ends up at HM Revenue & Customs. While most motorists are only too aware of the high amount of tax they pay on fuel and road tax, few realise they are paying tax on their car insurance. People also pay tax when they pay for their car to be serviced or repaired, when they buy new tyres and when they take out breakdown cover.
The group said it would cost the average motorist 387 to drive from Land's End to John O'Groats, including petrol, depreciation costs and the cost of insurance, breakdown cover and servicing for the journey, of which 104.49 would be paid in tax.
Ludwig adds: "No doubt the additional tax revenues generated by the Treasury will be used to help plug the enormous pensions black hole, a legacy of decades of under provision."
Whether the Chancellor has taxpayer treats in his box on 22 March remains to be seen.
What will the Budget hold? See next week's Smart Money for the top predictions.
Legitimate tricks to help you keep more of your money
MOST people are blissfully unaware of how much of their income is eaten up by taxes.
Yet, those with the average national income of 21,949.20 spend five months of each year's wages on tax.
That is an awful lot more than just income tax and National Insurance at 4,920. Some of this extra tax is unavoidable. You have to pay VAT on what you buy, for example. But not all of it is necessary.
Cutting down on the tax you pay is a painless (and rather satisfying) way of making sure you are doing the best by your bank balance.
Many people are put off by the complexities of tax. But there are a number of simple steps you can take to pay less.
Tax-efficient investment: Analyse your investments to make sure they are as tax-efficient as possible. Do you hold any shares? You can become more tax-efficient by moving them into a self-select individual savings account (ISA). While the level and basis of taxation might change over time, ISAs are free from capital gains tax and, if you are retired, income from dividends is taxed at 10 per cent. High net worth individuals should look into other tax-efficient vehicles, including certain pensions, trusts, offshore investments, government bonds and Enterprise Investment Schemes. Independent financial advisors can devised tailored plans.
Family finances: Review your whole family's finances. If you have children born recently, you might be eligible for a child trust fund (CTF). If so, the government will write to you.
You can also add to the voucher with your own money and save for your children tax-efficiently.
If you have older children that are not eligible for the CTF, but you would like to save for their future, look at investing in National Savings certificates and premium bonds for children, some of which offer tax-free savings.
Council tax: The average council tax bill comes in at 894 a year. However, you might be able to bring your bill down.
For the first six months of being a council taxpayer in a new home, you are entitled to challenge the valuation band of that property.
By bringing the valuation down just one band, you can save between 100 and 300 a year. Log onto the Valuation Office Agency's website, www.voa.gov.uk, for more information.
Personal tax allowances for 2006-7 will not be announced until the budget. It is possible Gordon Brown will close some of the few loopholes left. But, until then, you can at least make the most of 2006.
Mark Rayden is technology services and product manager at share dealing firm Hoodless Brennan ( www.hoodlessbrennan.com .