For decades, real estate in Australia has thrived on trust, relationships, and a certain implicit understanding between buyer, seller, and agent.
But from July 28, 2026, that informal system is being challenged by a sweeping set of anti-money laundering (AML) reforms designed to crack down on financial crime in property transactions.
Lucas McEntee, CEO of Riverstone Partners, has spent the past year advising agents on the new rules.
He explains that they are more than just bureaucratic requirements and represent a cultural shift in the way the industry operates.
These rules are about aligning Australia with the international community, where due diligence and transparency have long been expected in property transactions.
“If you don’t know your client, you’re on the wrong side of the law,” he says.
“It’s not just ticking boxes – it’s about protecting the integrity of the market and your own practice.”
Beyond ID Checks: Understanding the Client
Mr McEntee emphasises that the reforms demand agents look beyond traditional paperwork.
Passports, driver’s licences, and utility bills are no longer enough.
Agents must understand who is behind the transaction and where the money comes from, particularly in high-value or unusual cases.
“You can’t just rely on someone presenting ID,” he says. “You need to understand the context, the source of funds, and whether the transaction makes sense.”
The concept he calls the “pub test” has quickly become a touchstone for agents trying to apply the new obligations.
Essentially, if you can’t explain the deal to a colleague raising eyebrows, then it should be flagged.
“It’s a simple test, but it captures the essence of professional judgment in a market under closer scrutiny than ever before.”
He shares practical examples to bring the pub test to life. A $3 million unit purchased through a complex trust structure, or a sudden deposit from an offshore account for a first-home buyer, would immediately trigger the pub test.
AUSTRAC has released free AML “starter kits” specifically for businesses with about 15 people or fewer, designed to help them meet the new requirements without huge cost or complexity.
In larger offices, central to the reforms is the creation of the responsible officer – a designated individual who oversees compliance, ensures proper documentation, and flags high-risk transactions.
“The responsible officer isn’t just signing forms,” he explains.
“They make sure the pub test is applied consistently, that documentation is thorough, and that any unusual activity is escalated properly.”
He also explains that this role brings accountability to office leadership.
“Documentation protects both the agent and the client,” he says. “It’s the difference between justifying a decision and being caught out by regulators.”
While the rules are clear on paper, applying them in practice can be complex.
Agents will encounter deposits from overseas accounts, young buyers with sudden wealth, multi-party corporate ownership structures, and other scenarios that complicate standard verification.
“You have to ask clear questions, even if they feel uncomfortable,” Mr McEntee says.
“It’s not about suspicion, it’s about ensuring transparency. And transparency protects everyone in the deal.
“You can still buy and sell the home. But, it’s the responsible officer’s job to review the file to determine if something suspicious has happened or not.”
He adds that digital reporting systems built by AUSTRAC are designed to ease the compliance burden, but acknowledges there is a learning curve for agents who have never worked in a regulatory environment.
Balancing compliance and client relationships
A common concern among agents is that these rules may harm client relationships.
While he acknowledges this tension but insists that transparency builds trust, not erodes it.
“Clients want to know their agent is diligent, competent, and law-abiding,” he says.
“By asking the right questions, documenting the process, and applying the pub test, you actually increase credibility. People respect professionalism when it’s handled thoughtfully.”
He also warns that failing to apply due diligence can have serious consequences. “It’s not just about fines,” he says.
“It’s about your reputation, your licence, and the integrity of the broader property market.”
He also sees the AML reforms as a chance to professionalise the sector; the new rules position agents not just as sales facilitators, but as guardians of market integrity.
“Transparency isn’t a burden – it’s a professional advantage,” he says.
“Offices that embed these practices consistently will differentiate themselves in a market that’s increasingly scrutinised by regulators, media, and clients.”
He also emphasises the cultural shift the reforms bring and agents must develop a mindset where due diligence is instinctive, not reactive.
“It’s about doing the right thing, even when no one is watching,” he says.
“The pub test is a simple way to codify that intuition in everyday practice.”
For agents looking to gain a deeper understanding of the new AML reforms, Riverstone Partners are offering in person training sessions where you will be guided through everything you need to do.
Click here to see locations, dates and registration details
