"Higher fees for the purchase of established homes, increased penalties for those that leave properties vacant, and strengthened compliance activity will help ensure foreign investment in residential property is in our national interest," Chalmers said in a statement.

The centre-left Labor government would also cut application fees for foreign investment in "build to rent" projects to encourage construction of more homes, Chalmers said.

The government in June pledged A$2 billion ($1.3 billion) to deliver thousands of new affordable homes nationwide, with the aim of boosting public housing supply for Australians on waiting lists.

The changes announced on Sunday will generate around A$500 million ($300 million), which the government could invest in priority areas like housing, Chalmers told reporters in Brisbane, according to a transcript.

"These adjustments are all about making sure foreign investment aligns with the Government's agenda to lift the nation's supply of affordable housing," Chalmers said in the statement, adding the government would introduce laws in 2024 to implement the higher fees.

The fee hike comes after Chalmers last year doubled the fees for foreign investors buying assets in the country, which the government said would generate A$455 million in extra revenue over four years.

Prices in Australia's housing market, already among the most expensive in the world, are forecast to maintain steady growth as rising demand outstrips supply in the nation of 26 million people.

($1 = 1.5205 Australian dollars)

(Reporting by Sam McKeith in Sydney; Editing by Cynthia Osterman and William Mallard)