More than 20 foreign investors have declared themselves to the Foreign Investment Review Board (FIRB) believing they may have purchased property illegally. 

Last week the Australian Tax Office (ATO) said 195 property sales were being investigated for possibly breaching laws that require foreign investors to receive approval from the FIRB before buying existing residential real estate. 

A statement from the Treasury Department this week said 24 declarations had been made to the FIRB as foreign investors take advantage of an amnesty that will see them escape prosecution if they come forward before November 30.

In the statement Treasurer Joe Hockey said the properties under investigation range from prestige real estate through to suburban properties. 

One investigation is centred around a foreign investor with links to 10 properties including a house worth $1.4 million and a $300,000 unit. 

Another case is likely to see a British investor sell a $700,000 Western Australia property they bought in March. 

"If the investor takes advantage of a voluntary divestment, it will be the second divestment since March,” Hockey said in the Treasury statement. 

"Foreign investors who think they may have broken the rules should come to us before we come to them. 

"They will still be forced to sell the properties, but will not be referred for criminal prosecution if they voluntarily come forward before 30 November."

After the amnesty has ended, foreign investors found to have illegally bought property will face stiff penalties. 

From December 1, individual foreign residents who breach foreign investment laws will face fines of up to $127,500 or three years in prison, while companies will face fines of up to $637,500.

The government also plans to introduce legislation to punish third parties who assist foreign investors in breaking the law after the ATO revealed in many cases relatives and ‘straw’ company directors were being used to bypass the laws. 

"Third parties who knowingly assist a foreign investor to breach the rules will also be subject to civil and criminal penalties, including fines of $45,000 for individuals and $225,000 for companies," the statement warned.