Property brokers who help overseas investors skirt foreign investment rules could soon face tough penalties.
A crackdown is one of the four key recommendations from a coalition-led parliamentary inquiry into Australia's foreign investment market.
It also wants a $1500 administration fee imposed on overseas buyers, an improvement in the leadership and systems at the Foreign Investment Review Board, and a national register that tracks overseas buyers.
Inquiry chair Kelly O'Dwyer launched a scathing attack on FIRB while tabling the report in parliament on Thursday, criticising it for having not taken any court action since 2006.
It defied belief there had been universal compliance for the past eight years, she said.
She put it down to a "significant failure of leadership at FIRB" during the Rudd-Gillard governments.
"If you are not prepared to enforce the rules, then it is less likely that people will comply with the rules."
Ms O'Dwyer said existing penalties were seen by foreign investors and others in the industry as the "cost of doing business".
Fines should directly relate to the value of the property concerned, she said, adding investors who breached the rules should not be able to profit.
The committee also suggested a user-pays model to take the burden off taxpayers for administering FIRB.
Ms O'Dwyer pointed to a recent analysis that showed a fee of $1500 for each property purchased by a foreign investor would generate revenue of $159 million over four years.
It's a recommendation not supported by Labor.
Deputy chair Ed Husic said rather than slugging foreign investors with a new tax in a "dash for cash", the focus should be on improving trade and investment relationships.
"One hopes this report dissolves from memory. Fast," he said.
The Urban Development Institute of Australia welcomed the report, but said any changes would have to be carefully considered.
Only a small minority of foreign investors broke the rules, it said.
"But they give a bad name to the vast majority who do the right thing," president Cameron Shephard said.