In his inaugural state budget earlier this month, Treasurer Tim Pallas unveiled two new taxes for foreign nationals who buy houses, apartments and vacant residential-zoned land in Victoria – a move designed to generate about $330 million over the next four years.

Under the policy, non-residents buying property will be required to pay the equivalent of 3 per cent of the purchase price from July 1, while an absentee land tax of 0.5 per cent would also be applied from 2016 to foreigners who do not occupy the new or existing dwelling they have purchased.

Mr Pallas said the changes were intended to lift the burden on Victorians. But in a report tabled in Parliament last week, the Labor-dominated Scrutiny of Acts and Regulations Committee questioned whether the bill "reasonably limits the Charter's rights against discrimination on the basis of nationality to achieve the purpose of ensuring that a larger number of local home buyers remain competitive in the housing market".

The committee's report is not the only time government's budget measure has come under question. Last week, the government caved in to industry demands by agreeing to a discretionary exemption for locally-based but foreign-owned developers amid warnings that its reforms would increase the cost of new homes and push foreign investment to other states.

In a further blow on Thursday, the upper house – where Labor does not have the numbers – also initiated an inquiry into the policy, raising concerns about the impact on housing supply and affordability.

Opposition planning spokesman David Davis accused the Treasurer of putting families at risk of having to pay a tax passed on by foreign-owned developers building on Melbourne's outskirts.

"This risks a slug of between $6000 and $10,000 to families in Mernda, Cardinia and other city-edge development zones," he said.

Mr Pallas' spokesman did not respond to Mr Davis' claims, and when asked if the bill was at odds with the human rights charter, referred The Sunday Age to a "compatibility statement" tabled in parliament when the legislation was introduced.

That statement admits the bill "limits a person's right to recognition and equality based on the person's race" but argues "this differentiation is central to the purpose of the proposed measures".

"These measures assist in balancing housing affordability to ensure that a large number of local homebuyers are able to remain competitive in the market," the statement says.

The upper house inquiry into the foreign buyers tax is one of several initiated last week, in a sign that the upper house is flexing its muscle to scrutinise Premier Daniel Andrews' legislative agenda.

"This week we have initiated investigations into the impact of Daniel Andrews' new taxes on housing affordability and his rate capping policy which could actually see rates go dramatically up," said upper house Liberal leader Mary Wooldridge. "All too often Daniel Andrews actions are for the benefit of his union mates rather than for Victorians."