George Osborne is investigating the potential of the a new tax in a bid to stave off a prospective house price bubble in London and the South East of Britain, according to Sky News.
Reports suggest the proposed scheme has already been costed and Osborne will make a final decision in the coming weeks.
Foreign owners of UK property are currently exempt for Capital Gains Tax, where UK sellers of investment or second homes pay 18 or 28% on any profits from sales.
Fears that foreign property investment is further stoking a house price bubble in the capital continue to rise. A report from Knight Frank confirmed 50% of its £1m properties in London were sold to foreigners. That figure rises to 69% for new-build.
The majority of foreign buyers are European or from the Middle-East, with smaller numbers from Russia, according to the report.
Liberal Democrat deputy leader Simon Hughes also urged London Mayor Boris Johnson to impose higher Stamp Duty on foreign buyers earlier this week.
He warned Johnson and other policymakers to “wake up” before the capital’s housing became a commodity for the “global super-rich”.