The expanded punishments were made public on Saturday as additional efforts by the government to cool soaring property prices driven by foreign investors (mostly from China).
"We want to ensure that illegal foreign investment is not unnecessarily driving up prices," Prime Minister Tony Abbott told reporters in Sydney, one of Australia’s hottest property markets.
"We want to maximise the opportunities for Australians to buy a home at the best possible price."
The new penalties now include up to three years in jail or fines of $127,500 for individuals and $637,500 for companies. Third parties who knowingly assist foreign investors to breach the rules will also face civil and criminal penalties, Reuters reported.
The Property Council of Australia welcomes the move. However, it also said it was “long overdue”, arguing “the government is undermining its own aim of making homes more affordable by simultaneously penalising legitimate foreign investment in new housing”.
On Friday, Treasurer Joe Hockey confirmed that the $39m Sydney harbourside mansion illegally acquired by a Chinese investor had been bought after the government ordered its reselling within 90 days. He added that 100 more property purchases remain under investigation.
The government earlier failed to deny or confirm if the Chinese owner initially bought the property using corrupt funds.
Collections: Mortgage News