The policy was part of the Tories' manifesto at the last election but was ditched during the negotiations to form the coalition government with the Liberal Democrats.
The indication has been welcomed by Saga, an insurance and services provider for the over 50s.
Speaking at an event yesterday, David Cameron suggested the idea is still a key goal.
He is widely quoted in the national media as telling an audience of older workers and pensioners at Age UK: "To me inheritance tax is a tax that should be paid by the very wealthy. I think you should be able to pass a family home on to your children rather than leave it to the taxman."
He said: "I would like to see that go further because I think even at £650,000, particularly in some parts of the country, you see someone who has worked hard, they have put money into their house, they have done it up to improve it and they want to leave it to their children and they don't feel that they are in any way the mega-rich, and they feel 'I should be able to do that without having 40% of it knocked off'."
With deficit reduction a prime aim still and the Liberal Democrats opposed to the move, it is unlikely that the policy could be enacted this Parliamentary term, though Mr Cameron said it remained an ambition and even suggested he would try to make it part of the last Budget before the election.

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Saga's director of communications Paul Green said: "Saga welcomes any considered move that allows more people the chance to pass on their hard-earned wealth to families and loved ones - cascading wealth down the generations is a good thing.
"There are many parts of the country where just owning a relatively modest home puts you in the frame for paying inheritance tax.
"Whilst the rich can pay for their affairs to be carefully managed, enabling them to swerve the levy, it's the affluent middle class that end up being clobbered by an inheritance tax threshold that has simply failed to keep up with house prices increases.
"This move will not only be welcomed by older homeowners who want to pass on an inheritance, but also to their children, grandchildren and loved ones who stand to directly benefit from the change."