Householders should be free to turn their driveway into a car park to boost their income and help provide cheaper parking spaces, Communities Secretary Eric Pickles says.
The Cabinet minister has promised to clamp down on a "back-door parking tax" that forces residents to seek planning permission to charge commuters to park on their property.
New government guidance will allow homeowners to rent out their drives for a single car without making a planning application.
It comes after some town halls demanded that households apply for "change of use" planning permission costing £385, with the threat of a £20,000 fine if they did not, Mr Pickles said.
Householders could earn more than £200 each month renting out their parking space, according to moneysavingexpert.com.
Mr Pickles said: "Councils should be welcoming common sense ways that help hard-working people park easier and cheaply and for families to make some spare cash.
"Councils shouldn't be interfering in an honest activity that causes no harm to others, unless there are serious concerns.
Eric Pickles wants new guidelines for renting out driveways "Parking charges and fines are not a cash cow for town halls. This Government is standing up against the town hall parking bullies and over-zealous parking enforcement."
Several internet companies have been set up to help households rent out their spare or unused dedicated off-street parking space near town centres, train stations and sports grounds.
Mr Pickles said residents would be allowed to rent a single parking space without planning permission, provided there was no public nuisance to neighbours, or other substantive concerns.
Householders wishing to change their garden into a car park or for other commercial uses would still require planning permission, he added.
It emerged this week that some councils were racking up huge surpluses from their parking-charge activities, according to figures from the RAC Foundation.
In 2011/12, English councils had a total current account surplus of £565m from their on-street and off-street parking operations.
This is a £54m increase on the £511m surplus in 2010/11, said the foundation.
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