"[Mr O'Neill] made it clear to me the ATO is preparing to unleash a massive taskforce to tackle the problem and that they are in it for the long haul."

The AFR understands the ATO, which took over the under-manned Foreign Investment Review Board's residential real estate compliance function in May, is seeking greater co-operation with real estate agents and others in the property industry who can help track down unlawful owners.

"If anyone looks like the have information, we will follow it up," said a source close to the new taskforce, which includes 50 investigators and data analytics experts and which is using sophisticated data-matching technology to cross-check property titles against immigration, Austrac and FIRB data.

Mr Simeon said in an interview with the AFR that a large percentage of foreign buyers were simply transferring property into the names of Australian residents "for just a $50 fee" to get around the rules. He believes the creation of a national property register will help stamp out the problem.

Buyers should also be required to provide a tax file number prior to purchase or bidding at auction, Mr Simeon said.



Until November 30, there is an amnesty from criminal and civil prosecution for foreign buyers who voluntarily come forward and disclose to the Foreign Investment Review Board that they have bought or own property unlawfully.

From December 1 foreigners owners who illegally own property face a maximum criminal penalty of $127,000 or three years imprisonment.

In a speech on August 8, Mr Hockey also put those that facilitate illegal transactions on notice saying that under the new regime, "third parties such as real estate agents, financial advisers and so on may be prosecuted as well for assisting in the purchase of existing residential real estate or the unlawful activity of someone involved".