Property sector faces tougher checks
It will soon be harder for money launderers to use ill-gotten gains to buy homes, with a raft of changes coming into effect with the new financial year.
Real estate agents, lawyers, accountants, conveyancers and sellers of precious metals will have to conduct background checks on buyers as part of anti-money laundering and counter-terrorism financing laws that take effect from Wednesday.
Shaun Doyle, compliance manager at real estate group Ray White, said for most transactions, the changes would have little impact beyond scanning some ID and ticking a box.
But some transactions, such as homes paid for in cash of unclear origin, would be more likely to be referred to financial crimes agency AUSTRAC, Doyle said.
“For most transactions, the impact will be very, very little. But for anyone who is trying to launder money, the intent is that they are caught,” he told AAP.
Compliance costs likely to flow through
Doyle said the new rules would inevitably lead agents, conveyancers and solicitors to pass on the cost of increased use of external compliance providers to consumers.
AUSTRAC has previously estimated more than $1 billion is being laundered through Australian property, although the true extent of the issue is hard to determine before the new laws come into effect.
Real Estate Institute of Australia chief executive Scott Rollason said the real estate industry was ready for the changes, which he described as a significant step in protecting the property market from financial crime.
“Financial crime happens in Australia every day and it costs up to $82 billion a year,” AUSTRAC says on its website.
“Much of the money being laundered through our systems is linked to harmful crime like illicit tobacco, environmental destruction, corruption, child exploitation and human trafficking.”
Businesses that provide designated services under the new laws are required to register with AUSTRAC to meet new reporting and compliance obligations.
The financial crime reforms, referred to as Tranche Two of updated anti-money laundering/counter-terrorism financing laws, are among several new requirements businesses will have to comply with in the new financial year.
