All foreigners seeking to buy Australian homes, businesses or agriculture will be hit with an application fee of at least $5,000 from December 1, delivering an estimated $735 million in revenue for the federal budget over the next four years.
The proportion of foreign investors in the real estate market has recently soared to around one quarter of all buyers, and that demand has been a key factor in Sydney's booming home prices.
The Reserve Bank has previously expressed concern about the level of foreign investment in real estate, and the impact on first time buyers, with the financial regulator asked to keep an eye on the amount of funds loaned to overseas buyers.
Under new budget measures, foreign investors will soon need to pay the government $5,000 when applying to buy a property worth up to $1 million, and $10,000 for properties worth more than $1 million.
The fee increases by $10,000 for each additional $1 million in property value.
As recently announced, the government is also cracking down on foreign buyers who break investment rules, by increasing criminal and civil penalties and handing almost $48 million to the tax office to improve its monitoring of foreign investment.
An individual who breaks foreign real estate investment laws now faces three years in prison and a fine of up to $135,000, while a business could be fined five times that amount.
But any foreign investor that has previously breached the rules has until November 30 to own up and avoid prosecution.
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