Anti-money laundering (AML) rules are becoming an increasingly important part of the regulatory landscape for Australia’s real estate industry. While the term itself can sound technical, the goal is relatively straightforward: preventing criminals from using property transactions to hide or move illicit funds.
As reforms expand AML obligations across the sector, many agents are asking what the changes actually mean for their day-to-day work.
According to Shaun Doyle, Agency Compliance Manager at Ray White, understanding the fundamentals is the first step.
“Anti-money laundering reforms are coming into effect this year to ensure real estate transactions aren’t used to hide, move, or launder illegal money,” Mr Doyle says.
“Agents need to be aware of a few basic things, such as who they’re dealing with, common red flags, suspicious behaviour, and how to appropriately escalate concerns.”
“These reforms are serious, as they are regulated by AUSTRAC, so agents and business owners need to pay attention.”
The key AML obligations agents need to understand
While the full legislation contains detailed requirements, several core obligations sit at the centre of AML compliance for real estate professionals.
Mr Doyle says these obligations focus largely on understanding clients and remaining alert to unusual circumstances in transactions.
“Key obligations that agents should know include:
- Customer Due Diligence (CDD): Understanding who your client is (buyers & sellers).
- Source of funds: Being alert to unusual funding arrangements, offshore money flows, or unexplained wealth.
- Ongoing monitoring: Noticing changes in behaviour, instructions, or transaction structures over time.
- Record-keeping: Keeping clear, accurate records of client details, communications, and decisions.
- Escalation of suspicious matters: Knowing when and how to escalate internally, typically to your compliance officer (CO).”
These processes are designed to ensure agencies maintain visibility over who they are dealing with and how transactions are progressing.
How AML affects everyday interactions with clients
For many agents, the biggest concern is whether AML rules will complicate normal interactions with buyers and sellers.
In practice, Mr Doyle says most legitimate transactions should remain straightforward.
“Most agents are confused about what AML means for them.”
“For most legitimate clients, the changes won’t be too impactful when handled correctly.”
He says a typical purchase scenario is unlikely to raise concerns.
“An example would be a standard offer with normal funding, which is typically of low concern, and the impact of the AML reforms will be minimal.”
However, more complex situations may require closer attention.
“Whereas a complex offshore structure, the urgency to exchange, and the reluctance to explain funding will trigger red flags that you will need to review with your compliance officer.”
Clearing up common misconceptions
One misconception circulating within the industry is that AML requirements will force agents to aggressively question buyers or request financial documentation during early interactions.
Mr Doyle says that is not the intention of the reforms.
“The AML reforms don’t mean interrogating buyers at open homes, asking for bank statements during inspections, or treating every client as suspicious.”
Instead, the shift is about awareness and observation.
“Instead, AML subtly changes how agents pay attention to who is giving instructions, notice unusual urgency, secrecy, or third-party involvement, or respond when something feels inconsistent or illogical.”
When something appears unusual, agents should escalate the matter internally rather than attempt to resolve it themselves.
“If something seems off with a transaction, better be safe than sorry, and speak with your office compliance officer.”
Building confidence through compliance
While regulatory change can feel overwhelming, Mr Doyle believes strong compliance knowledge ultimately benefits agents and their businesses.
“The best operators in any industry are those who understand the legislation and regulations governing it,” he says.
“This gives agents a lot of confidence that they can talk to their customers about a broad range of matters without risking penalties or prosecution for non-compliance.”
He says regular training can help agencies stay across the evolving regulatory environment.
“When an office appoints a compliance officer, they should run weekly or fortnightly training sessions for everyone, ensuring everyone is upskilled in the legislation.”
That training should extend beyond AML alone.
“That isn’t just AML, but everything in the real estate industry: Privacy, Spam Act, Underquoting legislation, etc.”
And in Mr Doyle’s experience, compliance-focused businesses often outperform the rest.
“Highly compliant agents and offices are typically the highest-performing.”
“Success leaves clues.”
AML rules around the world
Australia is not the only country bringing real estate into AML regulation. Globally, property transactions are recognised as a potential vehicle for laundering illicit funds, and many jurisdictions have imposed AML obligations on real estate professionals.
United Kingdom
The UK has had AML obligations for estate agents for several years under the Money Laundering Regulations 2017. Agents must:
- Conduct customer due diligence
- Verify the identity of buyers and sellers
- Identify beneficial owners of companies purchasing property
- Keep records and report suspicious activity
The UK also introduced a public register of overseas entities that own property to increase transparency.
United States
In the US, the Financial Crimes Enforcement Network (FinCEN) targets high-value, all-cash property purchases. Agents must disclose the beneficial owners behind companies buying property, especially in major cities like New York, Miami and Los Angeles.
European Union
Across the EU, the Sixth Anti-Money Laundering Directive (6AMLD) requires agents to:
- Identify beneficial owners of purchasing entities
- Report suspicious transactions
- Conduct enhanced checks on high-risk clients
- Keep AML records for at least five years
Middle East
Countries such as the United Arab Emirates require real estate brokers and developers to:
- Verify customer identities
- Confirm sources of funds
- Report suspicious transactions
Regulators in the UAE have carried out inspections to ensure property firms comply with these rules.
Where Australia fits in
Australia has historically lagged behind many international markets in regulating real estate under AML. Until recently, property professionals were not fully covered by AML regulation.
New legislation extending AML obligations to agents, lawyers, accountants, and developers is expected to bring Australia more in line with global standards.
For agents, AML compliance is less about complex investigations and more about developing awareness, maintaining clear records, and knowing when to escalate concerns.
Understanding these fundamentals, both in Australia and in comparison to international best practice, can help agents navigate regulatory changes confidently while continuing to focus on delivering strong outcomes for their clients.
