Australians buying or selling property will now be required to verify their identity under new anti-money laundering and counter-terrorism financing (AML/CTF) laws that came into effect today.
The reforms require real estate agents to take reasonable steps to confirm the identity of their clients, typically using a driver’s licence or passport, in a bid to prevent criminals from using property transactions to conceal or move illicit funds.
In some cases, agents may also ask additional questions about the source of funds used to purchase a property and a client’s broader source of wealth. They will also be required to report suspicious transactions and activities to the national financial intelligence agency, AUSTRAC.
The changes bring the real estate sector into line with national and international anti-money laundering standards. Conveyancers, lawyers, accountants and other designated professionals are also subject to the new requirements.
The reforms follow estimates from the Australian Institute of Criminology that serious and organised crime cost the Australian community up to A$60 billion in 2020–21, with illicit financing playing a central role in many criminal activities.
Real Estate Institute of Australia chief executive Scott Rollason said the reforms represented an important step in protecting Australia’s property market from financial crime.
“These reforms are designed to make it harder for criminals to use property transactions to hide or legitimise illicit funds, and to strengthen the integrity of Australia’s economy,” Mr Rollason said.
He said buyers may be asked how they obtained the funds for a property purchase, whether through salary, savings, investments, gifts or the sale of assets. In some circumstances, agents may also need to understand a client’s broader source of wealth.
Real estate agencies across Australia have spent recent months preparing for the changes, with staff undertaking mandatory training to identify suspicious transactions and potential money laundering risks.
Raine & Horne chief executive officer Chris Nicholl said most Australians would already have the documentation required to complete the new verification process.
“Most people will already have the required identification with them at all times, such as a driver’s licence,” Mr Nicholl said.
“In most cases, the verification process takes only a matter of minutes. Your agent can do this in your living room while signing the agency agreement, or it can be done by SMS or email.”
Ray White agency compliance manager Shaun Doyle said property transactions had long been recognised as a target for laundering proceeds from drug trafficking, fraud and corruption.
“The complexity of property deals, often involving hidden corporate structures, overseas funds, or undisclosed trusts, has made it an attractive pathway for dirty money,” Mr Doyle said.
“From 1 July 2026, that gap will close permanently.”
Mr Doyle said the changes should have little impact on legitimate buyers and sellers, noting that Australians were already familiar with identity and background checks when opening bank accounts or applying for mortgages.
“The AML reforms don’t mean interrogating buyers at open homes or treating every client as suspicious,” he said.
“It is simply about awareness, observation, and fulfilling our collective responsibility to ensure we can be proud of every single transaction.”
Under the new laws, agents and agencies that fail to identify and report suspicious transactions face significant penalties. Corporations can be fined up to $33 million per breach, while individuals may face fines of up to $6.6 million for non-compliance.
