Investigations are underway into almost 200 cases where foreign investment rules on residential real estate may have been bent or breached.
The widened probe into foreign investment comes a month after the Federal Government announced plans to crack down on rogue foreign investors amid concerns that speculators might be fuelling a dangerous property bubble in Sydney and Melbourne.
For more I'm joined by our business editor Peter Ryan.
Peter, what have the investigations uncovered so far?
Michael the Foreign Investment Review Board is investigating 195 cases where rules on foreign investment might have been broken.
Twenty-four of those cases owned up voluntarily given the recent publicity.
One is a British investor who'd bought a $700,000 property in Western Australia. Negotiations are underway for it to be sold as a ";voluntary divestment";.
Now the background to this is that foreign investors are not allowed to purchase established properties, though they can buy into new developments for homes and apartments to boost supply.
But Kelly O'Dwyer, Parliamentary Secretary to the Treasurer, told me the net is closing in on investors using trusts and other loopholes to get around the rules.
They're properties that range in value from the hundreds of thousands through to the multi-millions.
We've already seen the Government take action with a $39 million property in Sydney that forced the divestment of that property.
But it's not just for prestige properties; it's also for properties in suburbs that people are living in where people may have made illegal purchases and where it may be having an impact on property prices.
So with the additional funding, with the additional powers, the ATO (Australian Taxation Office) for example really is able to put a tighter net around anyone who might be potentially bending the rules.
A much, much tighter net.
In fact we have already identified breaches where one individual is linked to 10 properties ranging in value from the hundreds of thousands to over a million dollars. And that individual is being properly investigated now by the Foreign Investment Review Board.
Anyone who comes forward would have to sell but what happens with the profit that they've made given the booming property prices particularly in Sydney and Melbourne?
Well, that's right they do need to sell. But they will be given a longer period in which to sell if they voluntarily come forward. If they don't voluntarily come forward of course the gloves are off.
Under the existing rules people have been able to profit from the illegal purchase of property if the value of that property has gone up.
We have closed that loophole with the new laws that we are bringing into place. We're not going to allow people to profit. It creates the wrong incentive for people to do the wrong thing. And that's just not on.
And some of the cases under investigation have come to the attention of authorities because of word of mouth in the community because of the greater awareness of foreign investment rules.
And we encourage anyone who is concerned that there may have been an illegal purchase to actually dob people in, they can do that anonymously.
Those tips will be investigated and we will make sure that if in fact a person has been dobbed in we will look at that transaction.
The Parliamentary Secretary to the Treasurer, Kelly O'Dwyer.
And Peter is there a grace period where foreigners who think they've broken the law can come forward?
Well Michael foreign investors who have broken the law have until the 30th of November to negotiate a ";voluntary divestment";.
But after that foreign individuals face tougher criminal penalties of $127,000 or three years, $637,500 for companies.
And as Kelly O'Dwyer mentioned there are plans to toughen penalties for investors who make a profit after selling properties bought illegally with a new civil penalty to ";capture any capital gain made on the divestment of a property";.
Business editor Peter Ryan there.