Recent years have seen significant advancements in the handling of conveyancing transactions and we are all aware that property sales are regulated as tax collection points for stamp duty, capital gains tax and the Foreign Resident Capital Gains Withholding Tax. Our firm has been assisting people to buy and sell houses for 75 years and we’ve noticed that regulatory obligations in conveyancing matters have increased significantly over the years. And more changes are coming.
From 1 July 2026, new regulations under the Anti-Money Laundering and Counter-Terrorism Financing legislation (AML/CTF) will take effect. This means that people such as lawyers, real estate agents, conveyancers and accountants will be required to develop and maintain an AML/CTF program, conduct client due diligence, conduct risk assessments and report certain transactions to the government.
If your activities are assessed as being of risk, you will be reported to the regulator. This is not because your professional service provider doesn’t like you; it is because they are obliged to do so. To be able to comply with the regulations, expect that you will be asked questions that you may believe are none of your provider’s business or have any relevance to your transaction.
The new AML/CTF legislation will require us to conduct an initial client due diligence to confirm and identify relevant risks. This will, as a minimum, consist of Verification of Identity which most people would now be familiar with. Clients limiting their face-to-face interaction with us will be specified as a red flag.
The risk assessment doesn’t stop at identification issues. While the framework for compliance is still being finalised, expect that you will be asked how you obtained your money and you may be required to justify it. We have been warned that higher wealth people and people with more complex structures including multiple companies and trusts are of higher risk. Purchasing with a non-mainstream provider of funds is also noted as being of higher risk.
If you refuse to provide information and you are deemed to be a reportable risk, your lawyer, real estate agent, conveyancer and/or accountant will be required to submit a report. Privacy laws do not prevent this reporting obligation.
The new AML/CTF reporting obligations are not just for property transactions but for all clients that lawyers and other professional providers are involved with. Property transactions are the most prevalent area where a greater number of people will be affected.
There will be more red tape and boxes to tick for every matter.
Do not shoot the messenger though. Compliance with the AML/CTF regulatory requirements is mandatory from 1 July 2026.
