Australia’s New Anti Money Laundering Laws: What Home Buyers and Sellers Need to Know

From 1 July 2026, Australian real estate agencies will have new responsibilities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, commonly referred to as the AML/CTF Act.

The changes are designed to make it harder for criminals to use Australian property to conceal illegally obtained money. For most buyers and sellers, the practical impact will be relatively straightforward, but it will mean additional identity checks and, in some circumstances, questions about ownership structures and the source of transaction funds.

What is money laundering?

Money laundering is the process of disguising money obtained through criminal activity so that it appears to have come from a legitimate source.

Real estate can be attractive to criminals because property is a high value asset that can be purchased, transferred, rented or later sold. Property transactions may also involve companies, trusts, overseas parties and complex payment arrangements, which can make the true owner or source of funds more difficult to identify.

The new laws bring real estate agents, buyer’s agents and certain property developers into Australia’s AML/CTF regulatory framework.

What is changing from 1 July 2026?

Real estate agencies will be required to enrol with AUSTRAC, maintain an AML/CTF compliance program, train relevant employees, assess transaction risks and report suspicious matters where required.

Agencies must also undertake customer due diligence, sometimes called “know your customer” checks, before providing certain real estate services.

These checks are not an accusation of wrongdoing. They are a standard legal requirement that will apply across the Australian real estate industry.

What will sellers need to do?

Before an agency can begin acting for a seller, it will generally need to confirm the seller’s identity.

For an individual seller, this may involve providing documents such as a driver licence, passport or other reliable identification.

Where a property is owned through a company, trust, partnership or another entity, the agency may also need information about:

• the entity’s legal structure
• the people authorised to act for the entity
• directors, trustees or partners
• the individuals who ultimately own or control the entity, known as beneficial owners
• whether a representative has authority to act on the owner’s behalf

Under the new rules, an agency acting for a seller must generally complete its initial customer due diligence on the seller before it begins providing the regulated service.

What will buyers need to do?

Buyers should also expect to be asked to confirm their identity during the transaction.

Where the selling agent is not acting on behalf of the buyer, the rules allow some buyer verification to be completed after contracts have exchanged. However, it must generally be completed no later than 28 days after exchange or at least three days before the originally agreed settlement date, whichever occurs first.

Buyer’s agents must generally verify their own buyer clients before beginning to act for them.

Buyers purchasing through a company, trust or other ownership structure may need to provide additional documents showing who owns, controls and is authorised to act for that entity.

Will everyone be asked about their source of funds?

Not necessarily.

The AML/CTF framework follows a risk based approach. An agency may ask how a purchase is being funded and, where the transaction presents a higher level of risk, may request documents supporting the source of the money or the customer’s overall wealth.

For example, supporting information could relate to:

• proceeds from the sale of another property
• savings or employment income
• a mortgage or other loan
• an inheritance
• business income
• investments
• funds provided by a family member
• money transferred from overseas

Additional questions may arise where a transaction involves large cash payments, unexplained third party payments, unusual company or trust arrangements, sanctioned jurisdictions, politically exposed persons or circumstances that do not appear consistent with the customer’s known financial position.

A request for this information does not mean the customer is suspected of a crime. It means the agency is completing the level of due diligence required for the assessed risk of the transaction.

Could the new requirements delay a sale or purchase?

They may cause delays if identification or ownership information is incomplete, inconsistent or provided late.

Where an agency cannot establish a customer’s identity or other required information on reasonable grounds, it may be legally unable to begin or continue providing the relevant service.

Buyers and sellers can reduce the risk of delays by responding promptly, ensuring identification documents are current and making company, trust and authority documents available early in the transaction.

What happens when something appears suspicious?

Real estate agencies will be required to monitor transactions and customer behaviour for unusual or suspicious activity.

Where an agency forms reasonable grounds for suspicion, it may be required to submit a suspicious matter report to AUSTRAC. The agency may also be legally restricted from telling the customer that a report has been made.

A suspicious matter report is not a finding of guilt. It provides information to AUSTRAC so that the relevant authorities can assess whether further investigation is necessary.

How will personal information be handled?

Real estate agencies will need to keep appropriate records showing that they have completed their AML/CTF obligations.

AML/CTF records will generally need to be retained for seven years. Agencies must also continue to comply with applicable privacy, confidentiality and information security requirements when collecting and storing personal information.

What does this mean for an ordinary property transaction?

For most legitimate buyers and sellers, the changes should not prevent or materially complicate a property transaction.

The main difference will be that real estate agencies must conduct more formal and consistent checks. Clients may be asked for identification earlier, purchasing and ownership structures may be examined more closely and additional information may be required for higher risk transactions.

The best approach is to provide accurate information, raise any complex ownership or funding arrangements early and allow sufficient time for the required checks to be completed.

These reforms represent a significant change for the Australian real estate industry, but their purpose is clear: to protect property markets, legitimate clients and businesses from being exploited for serious financial crime.

This article provides general information only and should not be treated as legal, financial or taxation advice. Requirements may vary depending on the parties, transaction and ownership structure.