Those investing in buy-to-let properties could face a SDLT (Stamp Duty Land Tax) surcharge, on top of stamp duty, if plans by the Chancellor Philip Hammond go ahead.
The original three per cent surcharge was introduced by George Osborne when he was head of the Treasury.
The move, which ostensibly aims to cool off house prices by making buy-to-lets less attractive, has been criticised by some as being counter-productive.
The former trade secretary, John Redwood, said: “There is no need to increase taxes and if you carry on increasing them you'll collect less money from people, which is the opposite of what we want to achieve.”
“The answer for the Treasury is cut stamp duty and you’ll raise more money.”
He described the idea as a "tax attack" on second home owners, adding it would result in fewer transactions.
According to the Sun, a government source said: “Increasing the buy-to-let levy is something the Treasury are looking at doing in the Budget.
“It will be sold as a measure to ease the housing crisis but it’s more about raising money.”
The levy would hit both buy-to-lets and holiday homes.
The buy-to-let sector has been buoyant in recent years thanks to record low interest rates. However, it has shown signs of slowing. In 2015 17% of new loans were for buy-to-let, a figure that has fallen to 13 per cent.
However, the total number of UK buy-to-let landlords hit 2.5m over the 2017-18 tax year.
Others suggest the key issue remains a lack of affordable housing caused in part by planning laws that are not fit to handle current demand for new properties.