Real estate joins the AML/CTF effort

The rollout of AML/CTF (anti-money laundering and counter-terrorism financing) provisions across Australia in 2026 will increase compliance obligations on real estate agents.

Financial institutions, including banks, have been required to comply with AML/CTF laws for close to two decades, and from 1 July 2026, the real estate sector along with other Tranche 2 sectors will also have to comply.

What is changing under new AML/CTF reforms?

The AML/CTF laws will require real estate agents to establish the identities of individuals (including verification) purchasing property and to report certain transactions and suspicious activities.

“The [anti-money laundering] reforms are a really critical element of keeping our customers and community safe in respect to identifying, mitigating and managing money laundering risks.” — Natalie Hall, General Manager FCC at CommBank.

Countries without robust AML/CTF laws become a weak point in the global financial system and attract illicit funds, says Hall, adding the reforms will bring Australia into line with much of the rest of the world.

Guiding real estate agents on new responsibilities

It’s important to note that under these reforms, real estate agents will be required to determine the economic purpose of a transaction and to make sure the nature and purpose of the activity is in line with the customer's profile.

“You do need to take steps to enquire and satisfy yourself that the information provided by the customer is reasonable and consistent with their profile.” — Natalie Hall, General Manager FCC at CommBank.

Many real estate agencies already have procedures in place to verify and check customers’ identities when they rent homes or commercial property to them.

Going forward, the real estate agencies will also be required to be curious and to check that customers have a plausible and reasonable explanation if they are making unusually large or complex transactions, she explains.

Why are the AML/CTF reforms vital for real estate businesses?

Leanne Pilkington, CEO at national real estate chain Laing+Simmons and President of the Real Estate Institute of Australia (REIA), describes the reforms as highly significant.

“It's an incredibly important thing for us to do,” she says.

“I didn’t really have a concept of how much money was being laundered in Australia — and particularly in property — and so that education piece in itself has been really interesting.”— Leanne Pilkington, CEO at Laing+Simmons and President of REIA

Setting out expectations

Agencies have many steps they can take to prepare before the reform is introduced on 1 July. As reporting entities, real estate agents will need to register with AUSTRAC by March 2026.

Pilkington says agencies should designate a person who is responsible for compliance and that it should be someone at a certain level of seniority. She stresses these team members will need to assist in having “the necessary procedures and processes developed and rolled out”.

Many of the transactions at Laing+Simmons are simple transactions such as individuals buying or selling property.

But when an entity such as a trust, superannuation fund or foreign buyer is purchasing a property, there needs to be a deeper layer of investigation, says Pilkington.

However, she notes there are existing apps to help agents with that process.

If a property buyer refuses to provide the required information or there is an issue with some of the information, agents must file a suspicious matter report with AUSTRAC.

The role of communication

 While details of the new reporting regime are still being finalised, and Pilkington says it will be important to keep the framework simple.

Another key challenge, she adds, will be raising awareness of the changes among agents and buyers.

Agencies that are part of a franchise group will likely receive information and education from their franchisors, but small independent agencies might not even be aware this is happening.

“The consumer also needs to be educated about the reforms,” says Pilkington.

“Imagine your reaction if a real estate agent started asking detailed questions about your finances and began looking into where your money came from. We really need AUSTRAC to help inform consumers about what's coming and what they can expect from their next real estate transaction.”

Ultimately, Pilkington highlights that consumers need to be made aware real estate agents will simply be the ones gathering information under these reforms. They won’t be making decisions about whether someone is laundering money or financing terrorism.

The expansion of AML provisions marks a turning point for Australia’s real estate industry; one that strengthens transparency and trust across the economy. CommBank is helping clients to adapt to this new landscape and unlock the benefits of stronger safeguards.