Property investors will pay up to 16 per cent on homes worth £1.6m or more, it was announced as part of the Welsh government’s draft budget for 2021-22.

The levy is to start at four per cent, previously three per cent, on properties up to £180,000 and increases in stages.

Wales finance minister Rebecca Evans said the budget would mean “difficult choices” as funding from the UK government to deal with the coronavirus falls.

Experts have warned the rest of the UK could follow suit.

Sean Randall, a partner at tax and advisory firm Blick Rothenberg, said: “The measures are a proportionate response to the effect of the pandemic in Wales. Pressure will now be on the UK government to pass similar measures.

“The Welsh government also announced that the stamp duty ‘holiday’ will not be extended in Wales. It will end, as planned, for completions on or after 1 April 2021.”