September 2026

One of the ways politicians and bureaucrats seek to solve problems is to make them someone else’s problem.

So when they wanted to deal with money laundering by criminals, they opted to dump the burden on to the business community – specifically businesses involved in real estate.

Unsurprisingly, the rules imposed on the industry make little sense and add significantly to the time and cost pressures placed on small businesses. Faced with cries of outrage from those impacted, the bureaucrats managing this farce responded with pompous arrogance.

This is all about AML (Anti Money Laundering) and CTF (Counter Terrorism Financing), matters which have nothing to do with the average small business. But politicians and bureaucrats have made them responsible for determining that everyone associated with a real estate transaction is not a criminal seeking to launder money.

The proposition is ludicrous. The police are seldom able to bring organised crime to justice, so what possible chance do property advisers have.

For real estate agencies and buyer’s agencies, at a time when the Federal Budget has undermined their business (and in some cases sent them broke), AML has become despised as they deal with the complexities of the demands of the Australian Transaction Reports and Analysis Centre (AUSTRAC).

While many businesses are cutting staff because of the negative impact of the Budget on their income, they are being told they need to hire more staff to handle the AML/CTF workload. And if they don’t toe the line, they could face fines so big they’ve been described as “a wipeout event”.

An example of the farcical nature of the process is the demands it makes on buyer’s agents, who represent the purchaser and typically have no contact with the vendor because they deal directly with the selling agent. The compliance rules place buyer’s agents in an impossible position, requiring them to confirm that vendors are not money-launderers for the criminal underworld. How that is remotely possible has not explained by the bureaucracy.

Compliance costs are already a big component of the national housing crisis, with the bureaucratic burden imposed on developers, builders and others in the housing industry adding massively to how long it takes and how much it costs to create new dwellings – thereby making homes increasingly unaffordable.

AML has become the latest compliance nightmare for the struggling industry. 

Mathew Williams wrote in the online magazine Real Estate Business (REB) that the growing complexity of the AML reforms exposes agencies to hefty penalties.

AML Partners managing director John Nguyen told REB that meeting the requirements are more difficult than most businesses realise. Nguyen said: “Given that it is so difficult for banks to become compliant – they’re always getting things wrong – what chance does a local real estate agency have in being AML compliant?”

The rules require agencies to develop a practical AML program, appoint an AML compliance officer and perform risk assessment to gauge their susceptibility to exploitation by criminals attempting to launder funds.

“They’re the main things to set you up and then there is a whole bunch of ongoing activities,” Nguyen said. “Most people’s misconception is that AML is just screening your customers, but there’s actually a lot more to it than that.”

He said any staff who had direct contact with customers needed to have completed proper AML training, not just the sales agent handling the transaction. And agencies could be hit with significant fines for failing to meet the requirements.

Fines could be as much as $19,000 a day for real estate agents or buyer’s agents who had not registered with AUSTRAC. Nguyen said the fines were so severe they were “basically a wipeout event”.

Nguyen said that buyer’s agents had even greater responsibility to be considered compliant than sales agents. “The grey area is actually on the vendor side of things – AUSTRAC actually requires the buyer’s agent to screen the vendors,” he said.

With the vendor on the opposite side of the transaction and most contact going through the sales agent, Nguyen said buyer’s agents would struggle to gain access to the seller. “That’s the challenge that the industry is facing at the moment because you’re being asked by AUSTRAC to do this, but there is no real way for you to do it,” Nguyen said.

Nguyen said that, rather than adding to the workload of their existing admin team and making compliance their job, it would be better to appoint someone whose primary focus was AML compliance. But many of the impacted businesses can’t afford to hire extra personnel when Federal Government changes to investment rules have reduced their income – and sent some businesses broke.

The bureaucracy watchdog at the centre of this shemozzle, AUSTRAC, has begun putting real estate agencies under scrutiny, less than three months after AML/CTF reforms took effect. It is sending section 167 notices to unregistered businesses, which require agencies to provide records covering their AUSTRAC enrolment, business structure, operations, services, payment methods and brokering agreements, including agency agreements and contracts of sale. It also seeks cash-handling policies and arrangements, along with invoices, receipts, purchase orders and transaction records for deals involving cash or virtual assets.

It’s unbelievable stuff which only a bureaucrat – one who has never had a job in the real world or run a business – could consider reasonable. But it’s becomes understandable when you hear AUSTRAC CEO Brendan Thomas preaching to small businesses.

Thomas claims the regulator had been clear about its expectations for more than a year. Many in the industry dispute that claim. There’s nothing clear about this.

“We’ve consistently said our regulatory focus would be on businesses that are complicit in criminal exploitation, or those that fail to meet these fundamental requirements,” Thomas told REB. “The notices we have issued to businesses are consistent with that approach.”

Thomas’ comment about “businesses that are complicit in criminal exploitation” appears to imply most real estate businesses are commonly and knowingly involved in money laundering for the criminal underworld. And it employs a “guilty until proven innocent” philosophy.

In his sermon to small businesses, Brendon the bureaucrat said: “There is nothing ambiguous about the requirement for real estate agents to enrol if they are providing designated services. We published our expectations well before the reforms commenced, and businesses have had ample opportunity to prepare.”

Everyone I have spoken to in the industry disputes the claim that the AUSTRAC requirements were well-communicated well in advance. Most had no idea of what was coming.