If you’re buying or selling property in NSW, you may notice some additional questions and checks when you engage your lawyer. From 1 July 2026, Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime expanded significantly, bringing certain services provided by lawyers, conveyancers, accountants, real estate professionals and other businesses within the regime.
The changes extend well beyond property transactions. However, buying and selling real estate is one area where many people are likely to notice the new requirements in practice. For property clients, this may mean additional identity checks or questions about the transaction and, depending on the circumstances, requests for further information regarding funding.
So, why have these requirements been introduced, what might your lawyer ask you for, and should you be concerned if you’re asked more questions than you were during a previous property transaction?
What changed on 1 July 2026?
Australia’s AML/CTF laws are designed to help prevent the financial system and legitimate businesses from being used to facilitate money laundering, terrorism financing and other serious financial crime. Banks and a range of financial businesses have been subject to AML/CTF obligations for many years.
From 1 July 2026, the regime expanded to cover certain services provided by a number of previously unregulated professions and industries, including legal professionals, conveyancers, accountants and real estate professionals. For law firms, the new regime applies when they provide particular services defined under the AML/CTF legislation as designated services.
This includes certain legal services involved in planning or carrying out a transaction to buy, sell or transfer real estate.
Do the new AML/CTF laws only affect property transactions?
No. Although this article focuses on property, the reforms are much broader than property law.
For lawyers and other professional service providers, designated services can also include certain services involving:
- the sale, purchase or transfer of companies and other legal arrangements;
- the creation or restructuring of companies, trusts and other legal arrangements;
- particular equity or debt financing transactions;
- receiving, holding, controlling or managing a person’s money or other property to help carry out certain transactions; and
- certain company and trust services.
Whether the AML/CTF regime applies depends on the particular service being provided, rather than simply the type of professional providing it. For property buyers and sellers, however, the practical effect is that the legal work involved in a property transaction can fall within the regime.
What does this mean when you’re buying or selling property?
If your lawyer is providing a designated service, they have obligations under the AML/CTF regime. One of the most important is customer due diligence, sometimes referred to as CDD.
Customer due diligence is the process of establishing who a customer is and understanding and assessing the money laundering, terrorism financing and proliferation financing risks associated with providing a designated service to them. In practical terms, you may notice that your lawyer asks for more information when opening or progressing your property matter than you may have been asked for in the past. This doesn’t necessarily mean there is anything unusual about your transaction. It may simply form part of the firm’s legal obligations.
What is a designated service?
A designated service is a particular type of service that is covered by Australia’s AML/CTF laws. Not every service provided by a lawyer or other regulated professional is automatically subject to the AML/CTF regime. Instead, the legislation identifies specific services that are considered designated services and therefore bring particular AML/CTF obligations into play.
For property lawyers, this includes certain services involved in planning or carrying out transactions to buy, sell or transfer real estate. For lawyers more broadly, designated services can also include certain services relating to companies, trusts, business transactions and managing a client’s money or other property.
When your property lawyer assists with a transaction that falls within one of these designated services, they may be required to carry out customer due diligence and comply with other AML/CTF obligations.
Why is my property lawyer asking for identification?
Confirming the identity of a client is a fundamental part of customer due diligence. Depending on your circumstances, your lawyer may need to collect and verify information about:
- your identity;
- anyone acting on your behalf;
- who ultimately owns or controls a company, trust or other entity involved in the transaction; and
- the nature and purpose of the transaction.
Property lawyers already carry out identity verification for other purposes, so providing identification when buying or selling property isn’t entirely new. However, the AML/CTF regime introduces separate customer due diligence requirements directed at understanding the customer and managing financial crime risks. As a result, the information requested or the way it is verified may be different from a property transaction you completed in the past.
Will my lawyer ask where my money came from?
They may, depending on the circumstances. Under the AML/CTF framework, information about a customer’s source of funds and source of wealth can be relevant to assessing and managing risk. There are also particular circumstances in which a reporting entity must establish or hold information about source of funds or source of wealth. The two terms mean different things. Source of funds generally refers to how the money being used for a particular transaction was obtained.
For a property purchase, for example, the funds might come from:
- savings accumulated from employment;
- a home loan;
- proceeds from selling another property;
- an inheritance;
- a gift from a family member; or
- business or investment income.
Source of wealth looks more broadly at how a person accumulated their overall wealth. Importantly, this doesn’t mean every person buying a property will automatically be required to provide extensive evidence about their finances. The AML/CTF framework is risk-based. The information required will depend on the client, transaction, service being provided and the risks involved.
What documents could I be asked to provide?
There isn’t one standard list that every property client will need to provide. In addition to identification documents, information requested in a particular matter could potentially include documents relevant to the transaction or the source of funds being used.
Depending on the circumstances, examples might include:
- evidence of finance from a bank or lender;
- information relating to savings;
- documents relating to the sale of another property or asset;
- evidence of an inheritance;
- information about business or investment income; or
- information supporting a gift or contribution towards a property purchase.
You won’t necessarily be asked for all, or even any, of these additional documents. What is required will depend on the circumstances. If your lawyer needs further information, they can explain what is required from you.
Why might one buyer be asked more questions than another?
Because AML/CTF compliance is risk-based. The level of customer due diligence required can vary depending on the risks associated with the customer, the transaction and the service being provided.
In some matters, the nature and purpose of the transaction may be straightforward from the outset. In others, additional information or verification may be required. This means you shouldn’t be concerned simply because a friend or family member wasn’t asked exactly the same questions during their property purchase. Different transactions and clients can require different levels of due diligence.
Do the requirements apply when selling property too?
Yes, they can. The professional designated services under the AML/CTF regime include assisting in the planning or execution of a transaction to sell, buy or transfer real estate. So these requirements aren’t limited to buyers.
If you’re engaging a lawyer to act on the sale of your property, the legal services being provided may also fall within the AML/CTF regime and require appropriate customer due diligence.
Will the new AML/CTF checks delay my property transaction?
They don’t necessarily have to. Property transactions are often time-sensitive, particularly where there is a short timeframe for reviewing a contract, exchanging contracts or preparing for settlement.
Responding promptly to requests for identification or additional information can help your legal team complete the necessary checks and keep your matter moving. If further information is required, providing it early is generally better than leaving it until exchange or settlement is approaching. This is another reason why it can be helpful to engage your property lawyer early in the buying or selling process.
Should I be concerned if my lawyer asks me more questions?
In most cases, no. Being asked to provide identification or information about your transaction doesn’t itself mean there is a problem or that your lawyer considers the transaction suspicious. Law firms providing designated services now have legal obligations to understand their customers, assess relevant risks and carry out appropriate customer due diligence.
For many clients, the main impact of the reforms will simply be some additional steps when opening or progressing a legal matter. If you’re unsure why particular information has been requested, ask your lawyer. They can explain what they need from you and help you through the process.
What do the changes mean for NSW property buyers and sellers?
For most people, the fundamental process of buying or selling property hasn’t changed. You’ll still need to deal with the contract, exchange, finance where applicable, searches and enquiries, settlement and the other steps relevant to your transaction.
What has changed is the compliance framework within which certain professionals involved in the transaction now operate. That can mean additional identification, customer due diligence and, where appropriate, further questions or supporting information. Being prepared for these requirements, and engaging your legal team early, can help make the process as straightforward as possible.
Buying or selling property in NSW?
At Southern Waters Legal, our Property Law team can assist with residential and commercial property transactions, from reviewing or preparing the contract through to exchange and settlement. We’ll guide you through the legal requirements of your transaction, including any information we require from you as part of the AML/CTF process.
If you’re considering buying or selling property, contact our Property Law team to discuss your next steps.
This article provides general information only and does not constitute legal advice. AML/CTF obligations depend on the particular service, client and circumstances of the transaction.
