From 1 July 2026, Australia's new AML laws require conveyancers, lawyers and real estate agents to verify the identity of property buyers and sellers and, in some cases, confirm the source of their funds before settlement. Here's what these changes mean for anyone buying or selling property.
The short version: From 1 July 2026, your conveyancer, lawyer and real estate agent have to verify who you are and, in some cases, ask where your money is coming from, before your property deal can go through. It's a new national law (the AML/CTF "Tranche 2" reforms) that applies to everyone buying or selling — not just you. For the vast majority of people it means a few extra ID steps and one or two straightforward questions. Honest buyers and sellers have nothing to worry about.
Key facts at a glance
- Starts: 1 July 2026 (the AML/CTF "Tranche 2" reforms).
- Who it covers: everyone buying or selling property — buyers and sellers.
- What you'll be asked: to verify your identity, and sometimes where your funds came from.
- How long it takes: on average about 4 minutes for an ID check, done once per matter.
- Should you worry: no — unless you're paying with large unexplained cash or hiding who's really involved.
What is AML, in plain English?
AML (anti-money laundering) is the set of checks a business must run to make sure money isn't the proceeds of crime. Money laundering is when someone takes money earned from crime and runs it through something legitimate — like property — so it comes out looking clean. Australian real estate has long been a popular wash cycle for dirty money, and until now agents, conveyancers and lawyers weren't required to check for it.
That changes on 1 July 2026. Under reforms known as Tranche 2, real estate agents, conveyancers and property lawyers join banks and casinos as "reporting entities" regulated by AUSTRAC, the government's financial-crime watchdog. In practice, it means the people handling your sale now have to do some basic checks to make sure a property deal is what it says it is.
If you've bought or sold before, you'll have done a lighter version of this already — handing over your licence for "VOI" (verification of identity) is not new. Tranche 2 just makes it more thorough, and makes it apply to everyone, every time.
When do the AML checks start in Australia?
The rules begin on 1 July 2026, when the Tranche 2 reforms commence. From that date the checks apply to every property sale and purchase, every time — there's no phase-in for individual buyers.
Why is this happening now?
Australia was one of the last developed countries not to apply these rules to property. International watchdogs had been telling us to close the gap for over a decade. AUSTRAC estimates billions in illicit funds move through Australian real estate every year. Tranche 2 is the fix — bringing us into line with the rest of the world and making it much harder to hide stolen money in a house.
What will actually change for me?
For most people, very little — just a bit more paperwork at the start. Here's what to expect.
Do I have to verify my identity to buy a house?
Yes. Handing your driver's licence to the agent at an open home won't be enough anymore. You'll go through a proper identity check — usually a quick digital process where you photograph your ID and take a selfie so it can be matched to you. It's the same kind of check you've probably done to open a bank account online. Sellers get checked too, not just buyers.
It's quick, and you only do it once. On average a Zettle identity check takes about 4 minutes, completed from your phone — and that same verification then secures every later communication on your matter, so a criminal can't impersonate you down the track to redirect your settlement money.
What is "source of funds" in a property purchase?
This is the new part that surprises people. "Source of funds" simply means where the money for the purchase came from. For some transactions you may be asked about it — basically, where the money for the purchase came from. If the answer is "we saved it," "it's the proceeds from selling our last place," "it's a gift from family," "an inheritance," or "we've got a loan from the bank," that's the end of it. A normal, explainable answer is all that's needed. A bank-financed purchase often needs no extra digging at all, because the bank has already done its own checks.
If you're buying through a company or trust, expect a couple more questions
If the buyer or seller is a company or a trust rather than a person, the checks have to reach the actual humans behind it — the "beneficial owners," generally anyone who owns or controls 25% or more. It's a bit more form-filling, nothing more, and your conveyancer will walk you through it.
So who should actually be worried?
Let's be straight: the rules are not aimed at ordinary buyers and sellers. They're aimed at a small group of genuinely dodgy behaviour. You'd only run into real friction if you're doing something that looks like one of these:
- Paying with a suitcase of cash. Cash deals of $10,000 or more must be reported to AUSTRAC as a matter of routine — and deliberately splitting a big cash payment into smaller chunks to dodge that threshold (called "structuring") is itself a criminal offence. Funding a house purchase with large, unexplained cash is the single biggest red flag there is.
- Money that can't be explained. If your funds don't line up with anything known about you and there's no clear story, that's a problem. "I saved it" is fine. "No comment" is not.
- Hiding who's really behind the deal. Buying through layers of companies or trusts to obscure the real owner, or using someone else's name, is exactly what these rules are built to catch.
- Refusing to provide ID, or pushing to skip steps. Reluctance to verify identity, or to specify where the funds have come from, is a classic warning sign, and your agent or conveyancer is now obliged to take note of it.
- Money heading somewhere strange at settlement. Asking for sale proceeds to be sent to an unrelated third party or an odd overseas account will, reasonably, raise an eyebrow.
If none of that is you — and for the overwhelming majority of people, none of it is — then AML is just a few extra minutes at the start of your matter.
What about politically exposed persons (PEPs)?
You might get asked whether you're a "politically exposed person." A PEP is someone in a prominent public role — a senior politician, judge, defence official, head of a government department — or a close family member or associate of one. The check is standard and runs quietly in the background for everyone.
Here's the key bit: being flagged as a PEP does not mean you're suspicious, and it doesn't stop your deal. It just means a little extra care is taken, because those roles carry a higher risk of bribery or corruption globally. If you're a local school principal, a tradie or an accountant, you're almost certainly not one — and you shouldn't be offended if you're asked. Everyone gets the question.
Will this slow my settlement down?
It can add a little time, mainly at the front end while identity and any source-of-funds checks are completed — which is exactly why doing them early matters. The single best thing you can do is respond promptly when your conveyancer or agent asks for ID or information. Done up front, it shouldn't hold up your settlement at all. Left to the last minute, it can.
What you can do to make it painless
- Complete your ID check as soon as you're asked — don't sit on the link.
- Have a simple, honest explanation of where your funds are coming from (savings, sale proceeds, gift, inheritance, loan).
- If you're buying or selling through a company or trust, tell your conveyancer early so the beneficial-owner checks are done ahead of time.
- Keep your funds moving through normal banking channels, not cash.
None of this is a trap. It's a one-time bit of admin that protects the whole market — and protects you, since the same identity checks are what stop a criminal impersonating you and redirecting your settlement money. Worried about AML? Just Zettle it.
Frequently asked questions
Do AML checks apply to renters?
No. The reforms apply to property sales and purchases, not residential rentals or commercial leases.
Do both buyers and sellers get checked?
Yes. It's a common myth that only buyers are checked. Sellers have their identity (and, for companies or trusts, their ownership) verified too.
Is verifying my identity new?
Not really. Verification of identity (VOI) already existed in conveyancing. Tranche 2 makes it more thorough and applies it consistently to everyone.
Can I still pay a deposit or buy with cash?
You can use cash, but any cash transaction of $10,000 or more must be reported to AUSTRAC, and breaking a larger amount into smaller payments to avoid that is a criminal offence. For a property purchase, normal bank transfers are far simpler.
Does being asked about my source of funds mean I'm under suspicion?
No. It's a routine question for many transactions. A normal, explainable source – savings, a loan, sale proceeds, a gift, an inheritance – is all that's needed.
Who actually sees my information?
Your agent, conveyancer or lawyer collects and securely stores it to meet their obligations, and they're bound by privacy law in how they handle it. It's only escalated to AUSTRAC if something genuinely doesn't add up.
What if I refuse to provide ID?
They won't be able to act for you — verification before settlement is now a legal requirement, not an optional extra.
How long do AML checks take?
Not long. On average a Zettle identity check takes about 4 minutes, completed on your phone — and it only has to be done once per matter, after which the same verification secures every later communication on your file.
When do the AML rules start?
The Tranche 2 reforms commence on 1 July 2026, and apply to every property sale and purchase from that date.
Zettle is a digital-first conveyancing service. The above is general information about the AML/CTF reforms and isn't legal advice for your particular situation — for that, it's a Zettle conversation.
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