From 1 July 2026, real estate agents, conveyancers and certain legal professionals became subject to expanded obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).

These requirements are commonly referred to as AML/CTF checks.

The purpose is not simply to confirm that the person exists. The agent or conveyancer must understand who the customer is, who ultimately controls the transaction, why the transaction is taking place and, where required, where the money has come from.

AUSTRAC describes this process as customer due diligence. It is intended to reduce the risk of Australian property transactions being used to launder criminal proceeds, finance terrorism or conceal the ownership and control of assets. (AUSTRAC)

What an Agent or Conveyancer May Ask For

The information requested will depend on whether the customer is an individual, company, trust, partnership or another type of entity. It will also depend on the risk associated with the particular transaction.

For an individual, the agent or conveyancer will commonly request:

(a) full legal name;

(b) date of birth;

(d) photographic identification, such as a driver licence or passport;

(e) confirmation that the person is acting for themselves and not secretly on behalf of another person;

(f) information about the purpose and circumstances of the sale or purchase; and

(g) where required, information about the source of the purchase funds or the person’s overall source of wealth.

For a company, trust or other entity, additional information may be required, including:

(a) the full legal name and registration details of the entity;

(b) the names of directors, trustees, partners or officeholders;

(d) the identity and authority of the person giving instructions;

(e) a company search, trust deed, partnership agreement or other governing document; and

(f) information about the beneficiaries, appointors, guardians, protectors or other people who may exercise effective control.

AUSTRAC’s guidance specifically requires businesses to identify relevant beneficial owners and people acting on behalf of the customer. For trusts, this may extend beyond the trustee and include people who retain practical control over the trust. (AUSTRAC)

Why Is Identification Required?

The identification process allows the agent or conveyancer to establish that:

(a) the customer is who they claim to be;

(b) the name being used matches the legal ownership of the property;

(d) the property is not being sold, purchased or transferred for an undisclosed third party; and

(e) the transaction is consistent with the information provided by the customer.

This is different from the traditional Verification of Identity process used in conveyancing.

Verification of Identity is principally concerned with preventing identity fraud and ensuring that the person signing or authorising a land transaction is the correct person.

AML customer due diligence is broader. It considers not only identity, but also ownership, control, the purpose of the transaction and possible financial crime risks.

The same identification documents may assist with both processes, but completing one process does not necessarily satisfy the other.

Why Are Questions Asked About Source of Funds?

A purchaser may be asked to explain how the deposit and balance of the purchase price are being funded.

Common answers may include:

(a) an ordinary bank loan;

(b) personal savings;

(d) an inheritance;

(e) a gift or loan from a family member;

(f) company or trust funds; or

(g) funds transferred from overseas.

The agent or conveyancer may also request supporting material, such as a bank statement, loan approval, sale statement, probate document, gift letter or evidence of a transfer.

This does not mean that the customer is suspected of wrongdoing.

The purpose is to determine whether the explanation is reasonable and consistent with the transaction. Questions are more likely where funds are coming from multiple people, overseas accounts, unexplained cash deposits, complex loans or entities that do not appear to have any obvious connection with the purchaser.

AUSTRAC identifies an inability or unwillingness to explain the source of funds or wealth, and the use of complex or unusual funding arrangements, as possible warning signs requiring further consideration. (AUSTRAC)

Why Might Both the Agent and Conveyancer Ask Similar Questions?

A customer may reasonably become frustrated when the real estate agent and conveyancer request similar information.

However, the agent and conveyancer may each be providing their own separately regulated designated service. Each business must comply with its own AML/CTF program and maintain its own records.

An agent cannot automatically assume that the conveyancer has completed all required checks. Likewise, a conveyancer cannot automatically rely on checks completed by the agent.

There are circumstances in which one reporting entity may rely on customer due diligence undertaken by another party, but that reliance must comply with the AML/CTF legislation and the reporting entity’s own procedures. It is not simply a matter of one business saying that somebody else has checked the customer.

This means that some duplication is unavoidable, particularly while the new system is being introduced.

Does Every Customer Have to Provide Everything?

No.

The AML/CTF system is intended to be risk-based.

A straightforward transaction involving an individual selling their long-held family home will ordinarily require less investigation than a transaction involving an overseas company, a complicated trust structure, unexplained third-party payments or funds passing through several jurisdictions.

However, every customer must provide enough information for the agent or conveyancer to complete the level of customer due diligence required under that business’s AML/CTF program.

Where the information provided is incomplete, inconsistent or raises further questions, additional documents or explanations may be required. Enhanced customer due diligence must be undertaken in higher-risk circumstances. (AUSTRAC)

What Happens if the Information Is Not Provided?

An agent or conveyancer may be unable to begin or continue providing the regulated service until the required checks have been completed.

Depending on the circumstances, this may mean that:

(a) a property cannot be listed or marketed;

(b) an offer cannot be properly progressed;

(d) settlement work may be delayed;

(e) the business may refuse or cease acting; or

(f) the matter may need to be considered under the business’s suspicious matter reporting procedures.

Customers should therefore complete AML requests promptly and ensure that the information supplied is complete and accurate.

Privacy Still Matters

AML obligations do not give agents or conveyancers unrestricted permission to collect every piece of personal information that may be available.

They should collect information for an identified AML/CTF, conveyancing or transaction-related purpose. They should also explain why the information is required, how it will be used, who may receive it and how it will be protected.

The information collected should be relevant to the risk being assessed.

For example, a request for identification and confirmation of beneficial ownership may be appropriate. Passing a customer’s complete identification file, date of birth, financial history and unrelated personal details to every party involved in the property transaction would be a very different matter.

AML compliance should not become an excuse for unnecessary collection or uncontrolled distribution of personal information.

The proper question is not merely, “Can we obtain this information?”

The proper questions are:

Why do we need it?

Are we required to collect it?

How will it be protected?

Who genuinely needs to receive it?

That distinction is central to maintaining both effective AML compliance and the privacy of people buying and selling property.

This can also be converted into a shorter client-facing explanation headed “Why are we asking you for AML information?” for use with your electronic verification request.

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