Anti-Money Laundering (AML) Reforms: What They Mean for Property Buyers and Sellers in Australia

Adaptive Settlements

Jul 14

2 min read

Australia's property market is entering a new era of regulation, with Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms expanding to include real estate professionals, lawyers, accountants and conveyancers.

While these changes introduce additional identity checks and documentation requirements, they are designed to protect both consumers and the integrity of Australia's property market.

Why are the AML reforms changing?

Money laundering involves disguising the proceeds of criminal activity to make funds appear legitimate. Real estate has long been recognised globally as an attractive avenue for laundering illicit funds due to the high value of transactions.

The Australian Government has expanded the AML/CTF regime to better align with international standards and help prevent organised crime, fraud and terrorism financing.

What does this mean for buyers and sellers?

If you're buying or selling property, you'll notice some additional steps during your transaction.

These may include:

Verifying your identity using government-issued identification.
Confirming the source of funds for your purchase where required.
Providing information about the beneficial owners of companies or trusts involved in the transaction.
Answering questions about the purpose and nature of the transaction.
Supplying additional documentation if requested.

While this may seem like extra paperwork, these checks are becoming a standard part of property transactions across Australia.

Why are settlement agents asking more questions?

Settlement agents now have legal obligations to understand who they are acting for and to identify transactions that may present a higher risk of money laundering.

This means they may request information that wasn't previously required, including:

Details of trusts or company structures.
Identification for directors, shareholders or beneficiaries.
Evidence supporting where purchase funds originated.
Information about anyone acting on another person's behalf.

These requirements are not discretionary; they are part of the regulatory framework that settlement professionals must legally comply with.

Will my information remain private?

Yes.

Settlement agents and other reporting entities must comply with strict privacy obligations when collecting and storing your personal information. Your information is collected solely to meet legal obligations and is handled in accordance with Australian privacy legislation and AML requirements.

How can clients prepare?

To help avoid delays, buyers and sellers should:

Have current photo identification ready.
Advise their settlement agent if a company, trust or self-managed super fund is buying or selling property.
Be prepared to explain where purchase funds have come from, if requested.
Respond promptly to requests for additional information or documents.

Providing information early in the process helps ensure your settlement proceeds smoothly.

The benefits of the new AML framework

Although these reforms add a few extra steps, they provide significant benefits by:

Helping prevent fraud and identity theft.
Protecting Australia's property market from criminal activity.
Increasing transparency in property transactions.
Supporting Australia's reputation as a trusted place to invest.
Providing greater confidence for buyers, sellers and lenders.