Home buyers and sellers will need to show their driver’s license or passport when they buy or sell a home under new anti-money laundering laws and counter-terrorism financing (AML/CTF) laws starting today.
It’s a move aimed at preventing criminals from using property transactions to hide or move money that’s been gained illegally.
From 1 July, real estate agents will be required to take reasonable steps to verify the identity of their customers, bringing the sector in line with national and international standards.
In some circumstances, agents may also need to ask additional questions about where the money is coming from, and the nature of the transaction.
Under the AML/CTF changes, agents will have to report suspicious transactions and activity to the national regulator AUSTRAC.
The changes come as the Australian Institute of Criminology (AIC) estimates that serious and organised crime costed the Australian community up to A$60 billion in 2020-21, with illicit financing at the centre of most crime types.
Real estate agents aren’t alone in the changes, with conveyancers, lawyers, accountants and other professionals also being mandated to verify the identity of their customers and the source of their funds and wealth.
Home buyers and sellers will need to show their driver’s license or passport when they buy or sell a home under new laws. Picture: Getty
Real Estate Institute of Australia (REIA) chief executive Scott Rollason said the reforms mark a significant step in protecting the Australian 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.
“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,” Mr Rollason said.
“In some cases, agents may also need to understand a customer’s broader source of wealth.”
Real Estate Institute of Australia (REIA) chief executive Scott Rollason said the reforms mark a significant step in protecting the Australian property market from financial crime. Picture: Supplied
Real estate agents across the country have been preparing for the new rules, undergoing mandatory training on how to spot fishy activity and transactions.
Raine & Horne chief executive officer Chris Nicholl said the vast majority of Australians will already have everything they need to complete the 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 real estate transactions were a well-documented target for laundering illegally obtained funds 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 most legitimate clients won't find the changes too impactful when handled correctly, adding that Australians were already used to identity and background checks when opening a bank account or applying for a mortgage.
“The AML reforms don't mean interrogating buyers at open homes or treating every client as suspicious,” Mr Doyle said.
Ray White agency compliance manager Shaun Doyle said most legitimate clients won't find the changes too impactful when handled correctly. Picture: Supplied
“It is simply about awareness, observation, and fulfilling our collective responsibility to ensure we can be proud of every single transaction.”
Agents and agencies can face serious consequences for failing to spot and report suspicious transactions and activity, with non-compliance fines reaching up to $33 million for corporations and $6.6 million for individuals per breach.
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