The landscape of the Australian property market changes permanently today, July 1, as sweeping new anti-money laundering and counter-terrorism financing (AML/CTF) laws officially come into effect.
The reforms officially bring the real estate sector into Australia’s strict AML/CTF regime, legally requiring property professionals to conduct stringent customer due diligence.
Under the new AUSTRAC regulations, real estate agents, alongside conveyancers, lawyers, and accountants, must now verify the identities of all buyers and sellers before providing services.
Real Estate Institute of Australia (REIA) CEO, Scott Rollason, said that the reforms mark a crucial turning point for the sector.
“From 1 July, real estate professionals are required to take reasonable steps to identify and verify the identity of their customers.”
What the changes mean for real estate practices
As of today, agents have an explicit legal obligation to know exactly who they are dealing with. If businesses fail to collect and verify this information, AUSTRAC has warned that there will be severe consequences.
Under the customer due diligence framework, real estate professionals must now legally require clients to:
- Provide verified identification: Such as a physical driver’s licence, passport, or digital driver’s licence displaying their full name, residential address, and date of birth.
- Provide business documentation: If dealing with a sole trader or business owner, agents must collect the business name, operating addresses, and Australian Business Number (ABN).
- Disclose financial origins: Answer direct questions regarding the source of funds or the nature of the transaction.
“In some circumstances, agents may also need to ask additional questions about the source of funds or source of wealth, as well as the nature of the transaction. These are now standard legal requirements across the industry,” Mr Rollason explained.
“For example, a buyer may be asked how funds for a property purchase were obtained, whether through salary, savings, investments, gifts or the sale of assets. In some cases, agents may also need to understand a customer’s broader source of wealth.”
While major networks have been preparing for months, compliance readiness across the broader industry remains varied.
Toby Taylor, General Manager of all-in-one AML solution APLYiD, noted that while corporate giants are well-prepared, smaller independent firms are arriving at the deadline in a much different headspace.
“A lot of the bigger agencies are sorted,” Mr Taylor said. “There are some independent agencies coming in today as leads.”
Despite this last-minute rush, Mr Taylor emphasised that agents shouldn’t be paralysed by industry fear-mongering.
“The whole market’s been scared of what happens when clients are high risk, how to verify buyers, and crazy edge cases… a decent amount of that is AML companies who have unfortunately done a good job of spreading a bit of fear … but, I am saying, baby steps, just start doing something. It’s only going get even harder wait any longer.”
Immediate next steps for lagging agencies
For agencies still scrambling to establish their compliance frameworks, Mr Taylor noted that getting started is far less complicated than people think.
“Your step one is to enrol with AUSTRAC,” he said. “People seem to think it’s a big thing, whereas it’s basically just going on to the website and creating an account. It’s not scary and you don’t need to upload anything.”
Crucially, businesses face a ticking clock following the launch and as of July 29, the government can fine agencies up to $18,000 a day if they have not completed this enrolment.
Beyond registration, Mr Taylor outlines a clear order of operations: “Get your AML policies created and get AML training underway… and then, honestly, just start doing something as it’s better than nothing – focus on progress over perfection, and improve over time.”
As part of that initial setup, Mr Taylor also emphasises that agencies should also look toward CRM integration.
Rather than treating compliance as a completely separate administrative burden, integrating verification tools directly into an agency’s existing CRM workflow allows staff to initiate checks smoothly without jumping between multiple independent systems.
The international advantage
While the sudden compliance load has caused administrative friction, Australia’s delayed adoption of these laws offers a distinct operational advantage.
“Australia is almost the last Western country in the world to have these checks in place,” Mr Taylor explained.
“We’re kind of lucky in that regard… we can learn from what did and didn’t work in NZ, the UK, everywhere else. Back when it rolled out in other countries, products were basic …it’s much easier for us than it was for anyone else.”
Ultimately, he compares the hurdle to a daily routine: “The longer you delay, the harder it’s going to get. Just start that process.”
Technology solutions driving compliance
To help property professionals manage these new administrative requirements, tech providers are launching targeted compliance tools. PEXA Group has introduced ‘PEXA Clear’, a platform designed to help tranche-two entities integrate identity and financial verification checks directly into existing settlement workflows.
PEXA Group CEO and Group Managing Director Russell Cohen said that the tool was built specifically with the sector’s workflows in mind, offering features like a pay-per-transaction model to minimise upfront friction. Several industry players, including Simonds, Clarendon Homes, and One Percent Property, adopted the platform ahead of the deadline.
Mr Rollason concluded that despite the short implementation window, with AUSTRAC only releasing its ‘Program Starter Kits’ in January, the real estate sector is actively leading other tranche-two industries, including jewellers and accountants, in framework adoption.
“We are seeing very strong engagement from industry, including significant enrolment levels with AUSTRAC,” Mr Rollason said. “Money laundering is not a victimless 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.”