Time has run out for foreign buyers who illegally own Australian real estate.

In May 2015, the government announced an amnesty of sorts for foreign investors who had breached Australia’s residential property rules.

Foreigners who illegally acquired an Australian home had seven months – until December 1 – to voluntarily come forward and disclose ownership.

In return, foreign investors were allowed a prolonged 12 months to sell their property and were protected from criminal prosecution.

But strict new rules around foreign property investment in Australia came into effect on Tuesday, and those who don’t abide by them now face tougher penalties.

The Australian Taxation Office is now in charge of overseeing foreign residential property investment, with 50 compliance officers charged with investigating potential breaches of the law.

Treasurer Scott Morrison says it is important foreign investment is appropriately monitored. Photo: Andrew Meares

Big fines and jail sentences

Treasurer Scott Morrison said that as of Tuesday, foreign property investors would be more closely monitored and stricter rules were now in force for foreign investors who don’t get approval before buying property in Australia.

In general, non-resident foreigners are limited to buying new property in Australia, but without permission, they face large fines.

“Existing criminal penalties have been increased to $135,000 or three years’ imprisonment, or both for individuals,” Treasurer Morrison said.

Previously, individuals dodging the rules faced a maximum penalty of $90,000.

Companies violating the rules will now face fines of up to $675,000.

The same imprisonment time and fines apply to temporary residents, such as international students, who don’t seek approval before buying an established property.

Generally temporary residents are allowed to buy an established property to be used as their place of residence in Australia, but approval is still required.

New application fees for foreign investors

From Tuesday, foreign applicants wanting to buy a residential property will now have to pay an application fee.

For a property valued at $1 million or under, the fee is $5000. For a property valued over $1 million, the application fee is $10,000.

For each additional million dollars the home is worth, the application fee increases by $10,000. So if a house is valued at $3 million, the application fee will be $30,000.

The fee does not provide any assurance of securing the property.

Third parties also face new fines

Property developers and third parties also face strict punishments for breaching foreign property investment rules.

Individuals, including buyers advocates and real estate agents, who help foreign investors breach property rules face fines of up to $45,000 while companies could be fined up to $225,000.

Property developers who fail to market apartments in Australia face a maximum fine of $135,000 or three years’ imprisonment.