It will be paid for using £800m of unspent cash from Whitehall departments.
Cash will also be made available to the devolved executives in Scotland and Wales, allowing them to make similar offers to keep council tax down.
Mr Osborne told ITV1’s Daybreak: “My message is I am doing everything, this government is doing everything, to help you, your family, to help the economy, to get people into work, to keep people in work.
“My job is to take the difficult decisions that help families to put food on the table and keep the people in work who bring home the bread.”
The chancellor’s speech will also call for a “can-do attitude” to overcome the country’s current problems.