Treasury mulls tax raid on foreign property owners London's booming high end property market - fuelled by cash-rich foreign investors - has been targeted by ministers for a new tax raid, as George Osborne tries to fill a £1.2bn hole in the public finances. The chancellor needs cash to fund two party conference spending commitments: the Liberal Democrats" £600m promise to give free school meals to all infants and the Tories" own £600m plan to reward marriage through the tax system. Treasury officials are looking at ways to generate more revenue from the property boom in certain parts of London - an idea backed by Nick Clegg, Lib Dem leader, who has long favoured higher taxes on expensive properties. Mr Osborne's aides described as "speculation" Sky News reports that he may use his autumn statement in December to impose capital gains tax on foreign owners of British property. Britain's taxation of foreign property owners is generous by international standards: while UK residents have to pay CGT when reselling all but their main home, non-resident property owners are exempt for all their properties. Treasury officials have long balked at the idea because of the practical complications; however the option is expected to be put to Mr Osborne as he prepares his statement. A UK-based buyer who purchased an investment property or second home for £1m and subsequently sold it for £5m would pay capital gains tax of £1.1m as a result, assuming they were a top rate taxpayer. Foreign investors, by contrast, are currently exempt from CGT, but under the Treasury's plans would also owe the Exchequer £1.1m if they sold up. Tax advisers said it was unclear what mechanism would enforce payment of CGT by individuals who no longer had any link with the country. Rosalind Rowe, real estate tax partner at PwC, predicted "a lot of administration and hassle." A simpler option would be for Mr Osborne to increase the rate of stamp duty charged on the sale of expensive properties, which tend to be concentrated in Kensington & Chelsea and parts of Westminster. Last year, he increased to 7 per cent the stamp duty charged on the purchase of homes worth more than £2m and closed down loopholes which allowed buyers to avoid stamp duty by putting their homes into corporate "envelopes." David Cameron has vetoed previous attempts by the Lib Dems - supported by Mr Osborne - for an annual levy on the value of homes worth more than £2m, popularly described as a "mansion tax." Last year's stamp duty rise has done nothing to subdue the wave of foreign investment in London property, which is increasingly being bought with cash by investors from countries such as China, Hong Kong and Singapore. More than £7bn of international cash was spent on prime London homes last year, figures from estate agent Savills show - a record high.as foreign investors look for safe havens for their assets. Figures from the Nationwide show London prices have risen by 10 per cent year-on-year. The capital's property market has received increasing attention from international investors seeking safe havens for their assets. Nearly three quarters of new-build homes in central London were purchased by international buyers last year, the FT revealed this summer. More than a quarter of these buyers were from China and Hong Kong, outnumbering even the British buyers.The second-largest group of international buyers was from the rest of Asia. The proportion of homes being bought outright with cash hit an all-time high of more than a third of all purchases earlier this year. However, Treasury officials believe the spike in prices for prime properties in central London is relatively self-contained and not a major driver of price inflation in the rest of the capital's housing market. Higher taxes on foreign buyers would not, according to that calculation, do much to depress house prices for ordinary families. Mr Osborne is also being urged by some Tory MPs not to impose punitive taxation on foreign residents who want to own property in London. "Lots of countries would love to have this problem," said one adviser to David Cameron. Lucian Cook, head of residential research at estate agents Savills, said: "I don't think these measures are necessarily about controlling house prices, as tax is just one of the many reasons why overseas investment is attracted to London. It is much more about equality in the tax treatment of UK and non-UK investors. Matthew Pointon, a property economist at Capital Economics, said a CGT change would be "a logical move to level the playing field" but said it would have little impact on prices at the top end of the market. Property experts said the only realistic way for the government to take some heat out of the housing market would be to release more land for development.