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Foreign investors may have to pay large fees before buying Australian residential real estate or businesses, the government has announced.

PM Tony Abbott said the government was proposing a range of civil penalties and fees linked to foreign investment.

Property prices are a hot button issue in Australia, especially in Sydney, and there are claims foreign investment is artificially boosting house prices.

But Mr Abbott conceded there was not enough data on this issue.

He also ruled out reviewing Australia's negative gearing rules, which some property analysts say also fuel property prices.

Negative gearing is when an investment generates a negative cashflow and allows the investor to claim tax deductions.
'Level playing field'

The proposals follow announcements earlier this year by the government that it was tightening the rules for foreign investment in agricultural land.

Under the new proposals, a foreign investor who wants to buy Australian property worth up to A$1m ($785,000, £508,000) would have to pay a A$5,000 application fee to the Foreign Investment Review Board (FIRB).

Investments over A$1m will incur a A$10,000 fee for every extra million dollars in the purchase price.

An application to buy a business worth A$1bn or more would incur a A$100,000 fee.