Overseas buyers face an additional an levy, potentially as high as three per cent, in a measure that would affect as many as 70,000 purchases and raise £120m, reports suggest.
It means a non-resident buying a second home worth more than £1.5m could end up with a stamp duty bill amounting to 18 per cent of the purchase price.
The surcharge on foreign buyers was included in the Conservative party manifesto.
And it is now expected to be included in Rishi Sunak’s first budget since becoming chancellor last month.
However, a final decision on the level of the surcharge has not been made – it could end up lower than three per cent, according to the Financial Times.
Funds raised from the new levy would be used to help the homeless, the report added.
There have been a number of calls to reform stamp duty ahead of the Budget.
Many critics feel the tax distorts the market and discourages people from downsizing, which would potentially free up more housing for growing families.
Expectations of fresh housing policies
Prime minister Boris Johnson has previously backed the idea of cutting stamp duty, but it remains to be seen if this will factor into Sunak’s plans.
Either way, there are expectations of a shake-up to housing policies in the Budget, according to Laura Suter, personal finance analyst at AJ Bell.
She said: “Boris Johnson’s pledges during his campaign to become prime minister that he would slash stamp duty seem to have been forgotten, but they could resurface.
“What is more likely is plans to shake-up the mortgage market, revealed in the Tory manifesto, with a promise to offer more long-term mortgages in order to cut the amount of deposit first-time buyers need.
“Details on how this would work were scant, but we look forward to finding out more.”
