Why Does Your Melbourne Real Estate Agent Suddenly Need Extra ID and Proof of Funds?

From 1 July 2026, Australian businesses providing designated real estate services became reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime. This includes seller’s agents, buyer’s agents and certain property developers, with newly regulated businesses required to enrol with AUSTRAC by 29 July 2026.

Agents must now verify the identities of buyers and sellers and understand the nature and purpose of the transaction. In higher-risk circumstances, they may also need information or evidence about a client’s source of funds or source of wealth.

These questions do not necessarily mean the agent suspects you of wrongdoing. They are part of a risk-based legal framework similar to the identity and transaction checks that have long applied to banks and other financial services.

Ordinary property management activities, including residential and most commercial leases, are generally excluded from these designated real estate services. A property management business will only have AML/CTF obligations where it also provides a regulated service, such as brokering a property sale or purchase.

What Customer Due Diligence Actually Means

Customer due diligence, often shortened to CDD, is the process of establishing who a customer is, who may be acting for them and why they are using the agency’s services.

Initial Customer Due Diligence

For an individual buyer or seller, an agent will generally collect information such as:

full name

date of birth

residential address

details of any representative acting on the person’s behalf

the nature and purpose of the transaction.

The agent must then use reliable information to verify the customer’s identity. A current driver’s licence, passport or proof-of-age card may be suitable, but AUSTRAC does not require every agency to obtain a certified photocopy. Verification may instead involve an original document, a reliable copy or an approved electronic identity-checking process. AUSTRAC’s guidance explains the available identity verification options for individuals.

Companies, trusts and partnerships require additional checks to identify their ownership, control structure, representatives and beneficial owners.

When Proof of Funds Goes Further

A source-of-funds check asks how the money for a particular transaction was obtained. Possible sources include salary savings, business income, investment returns, the sale of another property, a gift or an inheritance.

This is different from simply identifying the bank account from which the money was transferred. AUSTRAC’s source-of-funds and source-of-wealth guidance focuses on the underlying origin of the money.

Detailed documents are not automatically required from every residential client. Additional evidence may be appropriate when the transaction or customer presents a higher money-laundering risk, such as:

substantial physical-cash payments

funds that do not appear consistent with the client’s circumstances

complicated company, trust or overseas ownership structures

unexplained third-party payments

links to higher-risk jurisdictions

foreign politically exposed persons or other high-risk PEP relationships.

In these circumstances, enhanced customer due diligence may involve bank statements, loan documents, contracts of sale, probate documents, company records or other reliable evidence.

The Victorian and National Context

The obligations arise under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and the reforms passed in 2024 that extended Australia’s AML/CTF regime to real estate, conveyancing, legal, accounting and certain other professional services.

AUSTRAC enrolment opened on 31 March 2026, the new obligations commenced on 1 July 2026, and the enrolment deadline for newly regulated businesses is 29 July 2026.

A regulated agency must have an AML/CTF program appropriate to its size, services and risks. It must also establish whether relevant customers and beneficial owners are politically exposed persons or are listed for Australian targeted financial sanctions, monitor transactions and behaviour, maintain records and lodge a suspicious matter report when the legal reporting threshold is met.

For Melbourne property transactions, these checks operate alongside existing requirements rather than replacing them. Buyers still need to review the contract and the Victorian Section 32 vendor statement, confirm finance and complete appropriate property investigations.

What This Looks Like in Practice

For a Seller

A seller’s agent generally begins providing a designated service to the vendor when the sales authority or agreement to broker the sale is signed. The agent will therefore usually complete the vendor’s identity checks during listing and onboarding.

For a Buyer

A seller’s agent generally begins providing the regulated service to the buyer when it is reasonably expected that the transaction will proceed—typically when the offer has been accepted and the contract has been signed.

A buyer’s agent begins providing the service to their buyer earlier, when the buyer signs an agreement authorising the agent to find or identify a property. This means a buyer using an advocate may be asked for identification during the initial onboarding process.

At an Auction

An auction buyer may not be known until the fall of the hammer. AUSTRAC allows initial CDD to be delayed in limited circumstances where completing it immediately would disrupt the ordinary course of business, but the agency must follow the delayed-verification rules and complete the checks within the required period.

Buyers preparing to bid should therefore carry suitable identification and make sure their ownership structure and finance arrangements are clear. They should also complete the usual legal and property checks, including reviewing Melbourne auction reserve-price rules and arranging appropriate building and pest due diligence before signing.

If unusual activity creates a reportable suspicion, the agent may have to submit a suspicious matter report. The agent must not reveal information that establishes an SMR has been or must be lodged where that disclosure could reasonably be expected to prejudice an investigation. This restriction is commonly known as the tipping-off offence.

What This Means for You

Melbourne buyers and sellers should expect identity verification to form part of the normal property transaction process. Source-of-funds or source-of-wealth questions may also arise where required by the agency’s risk assessment or the circumstances of the transaction.

You can reduce delays by having current identification, finance approval and a straightforward explanation of your funding arrangements available. Where funds come from an inheritance, gift, business, overseas account, trust or previous property sale, keeping the relevant supporting documents accessible may help the agent complete the check efficiently.

A regulated Melbourne agency such as Forge Real Estate can incorporate AML/CTF verification into its sales and buyer-support onboarding so that the compliance process sits alongside appraisals, contract preparation, property due diligence and negotiation.

Separate from AML/CTF compliance, buyers who need a home to support disability access, safer movement or ageing in place should assess the feasibility of modifications before committing to a property. Mobility Access Modifications provides accessible home modification services across Melbourne, including ramps, bathroom modifications, rails and doorway solutions.

Forge Real Estate Melbourne can help you blueprint your future by finding the perfect blue-chip property where your lifestyle needs and investment goals converge.

📞 Phone: (03) 91003633

✉️ Email: info@forgeproperty.com.au

🌐 Website: www.forgerealestate.com.au

We offer specialized consultation and can assist in both Mandarin and Cantonese.