"We think that investors aiming to spend under A$1.5 million ($1.17 million) will be encouraged to look somewhere else."

"It will be a real disincentive and there will be a lot of uncertainty. They'll know they have to pay the fee but they don't know if they'll get the property. That's not the position most people want to get in to."

Mandy Lee, a Melbourne-based real estate agent specializing in international investments, was just as critical, saying the government might think the fee is small, but international buyers won't be pleased by the idea of handing over money just for privilege of trying to invest in Australian property.

"Some buyers will definitely be scared off," she told Xinhua.

Chinese investment in Australian real estate has almost doubled in the past five years. Juwai.com said Chinese buyers spent $5.3 billion on Australian residential property in 2013, up from $4.2 billion in 2012, which in turn was up from $2.4 billion recorded in 2009-10.

The company estimated that 63 million Chinese people had enough wealth to secure overseas property, almost three times the Australian population, and Australia was one of the top destinations for those looking to invest.

Platter said he was concerned how the new laws would affect the Australian economy.

"We think the proposed changes are a bad idea from Australia's point of view. They're likely to discourage a lot of buyers at the A$1.5 million ($1.17 million) and below," Platter said.

"Those are precisely the buyers who make it possible for developers to create jobs in making houses, like building and construction."

Lee also said the broader economy would suffer as a result of the changes.

"I think maybe next year the government will see the Australian economy drop," she said.