Smaller firms & sole traders less prepared for new anti-laundering obligations

Highlights

• The Federal Government is expanding Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regulations to the property sector.
• From 1 July 2026, property lawyers, conveyancers and real estate agents who facilitate the sale, purchase and transfer of a real property are required to have an AML/CTF program that specifies provisions for due diligence procedures to be completed for buyers and sellers during their transaction.
• Real estate agents reported to have a greater awareness of the coming reforms, and are more prepared for them, when compared with lawyers and conveyancers.

 

Introduction

What is anti-money laundering/counter–terrorism financing?

Property in Australia is a source for criminals to launder funds or to conceal funds from law enforcement, which helps fund criminal activity. The Australian Government has recently expanded the scope of the Anti-Money Laundering/Counter-Terrorism Financing Act 2006 (AML/CTF) to include property transactions. 

From 1 July 2026, these new AML/CTF changes will apply to and create obligations for certain entities involved in the sale purchase and transfer of property, including real estate agents, conveyancers, and solicitors. 

The new responsibilities for those affected include conducting customer due diligence (similar to know-your-customer checks done by banks), and to report suspicious activity to the Australian Transaction Reports and Analysis Centre (AUSTRAC), Australia’s anti-money laundering and counter-terrorism financing regulator. 

Survey Methodology

PEXA has commissioned a survey, independently conducted by Nature, enquiring into how entities within the Australian property sector view the upcoming AML reforms. Approximately 200 PEXA practitioners (lawyers and conveyancers who use the PEXA Platform), and over 100 real estate agents responded to the survey.

 

 

 

Key Findings

• Real estate agents were both more prepared for and more aware of the coming changes in comparison to practitioners, with 71% of real estate agents at least somewhat familiar with the new obligations, compared to 35% of practitioners. Respondents from sole traders and smaller firms were less likely to be familiar with the coming changes when compared with larger firms, particularly among real estate agents.
• Similarly, a higher proportion of real estate agents (74%) believed that they were adequately prepared compared to 18% of practitioners. Those who were prepared were likely to be familiar with the changes, but the reverse is not true, with a subset of practitioners responding that they were familiar with the changes but not prepared for them.
• When asked about the positive impact these changes will have on the property market, real estate agents believed that these changes would improve the transparency of the property market, uplift their professional image, improve trust and the legitimacy of investment into the market. Practitioners were not as positive as real estate agents, with some believing that reducing or eliminating criminal investment would lower property prices.

Real estate agents are comparatively more aware and more prepared for the upcoming changes

 

 

Sole traders and smaller firms are less likely to be familiar with the upcoming changes to the AML regime

 

74% of Real estate agents believed that they are adequately prepared, compared to only 18% of practitioners

 

 

 

Unsurprisingly, those who are more prepared tend to be more familiar with the AML regime changes. There are several practitioners who considered themselves either somewhat familiar or familiar with their new obligations, but don’t consider themselves prepared. 

Real estate agents who specialise in commercial real estate, as opposed to residential, were likely to be more informed and more prepared for the upcoming changes and their obligations. 

Practitioners have a better understanding of how the new obligations impact their business 

 

 

Although real estate agents believed that they are more prepared, they had a lesser understanding or were not sure about how the changes would impact their business. 

 

 

 

Practitioners and real estate agents had common themes when asked about what negative impacts the changes would have. Increased risk and burden, particularly to small business, and the cost to customers and their business profits were all mentioned. 

PEXA is evaluating ways to help

The Federal Government has included in the legislation provisions to allow Australia’s critical national infrastructure to be leveraged to support the new laws. PEXA recognises that the AML-CTF regime is important in safeguarding the integrity of our financial system. 

The PEXA Exchange connects an extensive network to efficiently, securely and reliably facilitate property settlements, and now processes around 90% of all property transactions across Australia.  With collaboration and guidance from industry bodies and AUSTRAC, we intend to determine the best way to leverage the PEXA Exchange to support our customers.