A British investor who illegally bought a $700,000 house in Perth will give up the property as part of a crackdown on foreigners snapping up local houses and units.

Treasurer Joe Hockey said the investor was one of 24 owners to have come forward voluntarily and confessed to breaking the foreign home investment rules.

The Foreign Investment Review Board has 195 cases under investigation. If the British investor goes ahead with divesting the Perth property, it will be the second since the Government started targeting foreign purchases of Australian homes in March.

Mr Hockey said 40 cases were under investigation after tip-offs from members of the public that complex corporate structures had been used to hide the true owner of a property.

There have been concerns in Perth real estate circles that people on temporary residency visas — who are entitled to buy established homes as long as they sell on leaving the country — have kept their properties as investments.

Twenty-two per cent of the 88,000 properties owned by temporary residents are in WA.

NSW (26 per cent) and Victoria (25 per cent) account for the bulk of the remaining homes.

Another issue raised is that the parents of some overseas students have bought homes on behalf of their children, a move that breaches existing laws. The Australian Taxation Office is creating a flying squad of 60 personnel to look at allegations of foreign purchases of residential property.

They will look through the purchase histories of properties thought to be illegally owned by foreign residents.

Significant sales over the past decade, which would take in the pre-global financial crisis property boom in Perth, are to be examined. They are not just “trophy” properties but other, more run-of-the-mill, houses and units. Mr Hockey said people who knew they had broken the law had until November 30 to go to authorities.

“Foreign investors who think they may have broken the rules should come to us before we come to them,” he said.

From December foreigners who illegally buy residential properties will face fines of up to $127,500 or three years jail. Third parties who knowingly assist them face fines of up to $45,000 for individuals and $225,000 for companies.