Housing Minister Grant Shapps said action was needed as home building was at its lowest level since the 1920s.
Details of the scheme are set to be revealed later today.
Shapps told BBC News: "We will not tell communities how or where to build.
"But the New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs
Shadow housing minister John Healey described the announcement as a con and said the scheme would cost billions
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