Foreigners who own or have an interest in agricultural land in Australia must let the country's tax office know by the end of 2015 or face tough new penalties.

Under a new law, the Foreign Ownership of Agricultural Land Act 2015, which came into being on 01 December there are compulsory notification requirements on foreign persons who have an interest in Australian agricultural land as of 01 July 2015 or acquire an interest or change that interest after that date.

Australia Agricultural LandAll such interests must be notified on or prior to 31 December 2015. Failure to comply with the notification requirements may attract penalties from the Australian Tax Office.

It is part of a new policy to strengthen the integrity of Australia's foreign investment framework, ensuring Australia maintains a welcoming environment for foreign investment that is not contrary to Australia's national interest.

The ATO has been accepting voluntary notifications of foreign interests in agricultural land since July 2015 but it is now mandatory. Anyone from overseas buying agricultural land after 30 December will be required to register it within 30 days.

The term 'agricultural land' is defined widely and includes land that is used or could reasonably be used for primary production business.

Penalties for non-compliance start at $180 for late lodgement but can increase depending on the circumstances of the non-compliance.

'The ATO will undertake compliance activities to ensure that the rules are enforced and penalties may apply if you fail to register by the required date. Penalties may be imposed from 31 December 2015,' said an ATO spokesman.

As well as applying to individuals the new registration rules also cover companies and trustees who own agricultural land or have an interest in agricultural land.

The new policy has also seen changes to screening thresholds for foreign investment in land. Since March 2015 threshold for agricultural land was lowered from $252 million to $15 million and since the beginning of December a $55 million threshold, based on the value of the investment, for investments in agribusiness has been in place.