AML Explained: Why Real Estate Agents Now Ask Buyers for ID

Since 1 July 2026, real estate agents right across Australia, RealWay included, have a new legal job to do before we can act for someone buying a property: check who they actually are. It's part of a set of national reforms known as Anti-Money Laundering and Counter-Terrorism Financing law, or AML/CTF for short, and this year it covers real estate for the first time.

We've noticed a few buyers pause when we ask for ID, which makes sense if nobody's explained why. So here's what's actually going on, why it's happening now, and what it means if you're buying with us.

Why real estate, and why now?

For close to twenty years, AML/CTF law applied to banks, casinos and money transfer businesses. Real estate wasn't covered. That left a gap, because property is one of the easier ways to move a large sum of money without much scrutiny, which is exactly why international bodies like the Financial Action Task Force have flagged real estate as a higher-risk sector for a while now.

The federal government closed that gap through what's called the Tranche 2 reforms, extending the same rules that already applied to banks to real estate agents, conveyancers, lawyers and a handful of other professions, starting 1 July 2026. You can read AUSTRAC's own real estate guidance if you want it straight from the regulator.

What it actually means if you're buying with us

Under the new rules, real estate agents become what AUSTRAC calls a "reporting entity." In plain English, that means we now have to:

• Verify who you are as part of the sale, your full legal name, date of birth and address, backed by ID documents. That applies whether you're the seller we're representing, or the buyer on the other side of the deal.
• If you're buying through a company, trust or self-managed super fund, understand who's actually behind that structure, not just whose name is on the contract.
• Keep a record of all of this for seven years.

None of this applies if you're renting. Property management and leasing sit outside these new rules entirely, this is specific to buying and selling.

When you'll actually be asked

We're representing the seller, so we verify their ID before we start acting for them, that part's straightforward. But because we're handling the whole sale, not just acting for one side, we also have to verify the buyer's identity, just with more time to do it: up to 28 days after contracts are exchanged, or at least 3 days before settlement, whichever comes first. It's worth having your ID ready early rather than leaving it to the last minute, whether you're the seller or the one making the offer.

Quick tip: a current driver's licence or passport covers most of what we need. If you're buying through a trust or company, having your trust deed or company details on hand as well saves a back-and-forth later.

Why this isn't a RealWay thing

We get that it can feel like an extra step, especially if you're used to a straightforward process. But it isn't something we've added on top, it's now a legal requirement for every agency in the country. AUSTRAC, the Australian Transaction Reports and Analysis Centre, is the government body responsible for it. We'd rather explain it upfront than have it catch you by surprise partway through a purchase.

The jargon, explained

AML/CTF: Anti-Money Laundering and Counter-Terrorism Financing, the area of law this all sits under.

AUSTRAC: the Australian government agency that oversees AML/CTF compliance and enforcement.

CDD (Customer Due Diligence): the official term for the identity checks agents now have to carry out.

KYC (Know Your Customer): common industry shorthand for the same process, verifying who you're dealing with.

PEP (Politically Exposed Person): someone in, or closely connected to, a prominent public position, who requires an extra layer of checking under the rules.

SMR (Suspicious Matter Report): a report an agent must lodge with AUSTRAC if something about a transaction doesn't add up.

Designated service: the specific activities that trigger these obligations. In real estate that's essentially handling a sale, transfer or purchase (AUSTRAC's own term for it is "brokering"). Property management isn't one of them.

Questions buyers keep asking us

We know new paperwork is never anyone's favourite part of buying a home. But knowing what's coming, and why, tends to make it a lot less annoying. If you're getting ready to buy and want to know what to have ready, give us a call before you start looking, not after you've found the place.

Curious what actually drives people to sell in the first place? Read Why Are We Sitting at This Table? next.

Want to know the next steps?

As our Sales Director, Annette Neil can connect you with the right agent or investor services support from the start.

Talk to Annette

General information only and current as at September 2026. This isn't financial or legal advice. For advice specific to your situation, please speak with a qualified professional.