A crackdown on dodgy foreign investors secretly buying up Australian houses will be boosted by a public tip off line to help catch law-breakers.

The federal government will launch a new platform to ensure foreign investors purchasing residential real estate in Australia are complying with rules, which from January 1 include tougher penalties.

Prior to COVID, foreign spending on Australian real ­estate had increased significantly in the past decade with overseas investors splashing $7.2bn on housing in 2018-19, including $2.8bn in NSW alone.

About 80 per cent of the 9295 residential properties bought by foreign investors nationally in 2018-19 were valued under $1m at the time, according to the latest Foreign Investment Review Board ­figures. Chinese investment accounted for about a quarter of all overseas commercial and residential real estate ­investment.

At the start of the pandemic the government dropped the threshold for international investments requiring approval by the FIRB to zero dollars temporarily amid security concerns overseas buyers could use the economic downturn to purchase sensitive land or businesses.

Under changes coming into effect next year, the $0 threshold will be permanent, and the FIRB will have enhanced monitoring and investigation powers, which The Daily Telegraph can reveal will include a public hotline to alert authorities to illegal dealings.

Treasurer Josh Frydenberg said the new Tip Off platform would "strengthen" Australia's foreign investment framework.

"This follows legislation passed by the parliament that introduces higher infringement notice penalties for breaches relating to residential land valued over $5 million from 1 January 2021," he said.

"This also includes new civil penalties and infringement notices for providing false or misleading information."

Mr Frydenberg said the "stronger" and "more flexible" enforcement options would ensure Australia's foreign ­investment regime was able to "respond to emerging risks and global developments".

"While the majority of foreign investors act in good faith, a high standard of enforcement is required in order to safeguard Australia's national interest," he said.

In one example of illegal activity, a 16-year-old temporary resident who was granted foreign investment approval to buy a $3.6m house in Melbourne on the condition they sold the property once their studies were completed was found to have instead kept it after leaving Australia.

The buyer was fined $12,600 and forced to sell the house in May 2020.

Originally published as Crackdown on foreign investors buying Aussie houses