The Short Version
Since 1 July 2026, real estate agents, conveyancers, solicitors, accountants and several other professions have been legally required to verify who you are before they help you buy, sell or transfer property. This is the reform commonly called tranche 2, and it is the largest expansion of Australia's anti-money laundering regime since it began in 2006.
Tens of thousands of businesses were brought into the system, with published estimates commonly putting the figure around 80,000 to 90,000. They had to enrol with AUSTRAC by 29 July 2026, and the obligations are now live.
Two things follow from that, and the second one is where people are losing money.
First, you will be asked for identity documents by more parties than before, sometimes by three or four separate businesses in a single transaction. That part is unavoidable and it is the law.
Second, some of those businesses are adding a fee to your bill for it. Some of those fees are legitimate. Some are not. The distinction is not a matter of opinion, and in the case of solicitors, a regulator has published guidance on exactly where the line sits.
Why This Happened
Australia signed up to the international anti-money laundering standards set by the Financial Action Task Force, and for roughly a decade Australia was one of a very small group of member countries that had not extended those rules to what are called designated non-financial businesses and professions. Property was the obvious gap. Banks were regulated from 2006; the professions that actually move property between people were not.
The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 closed that gap. AUSTRAC opened enrolment on 31 March 2026, the obligations commenced 1 July 2026, and newly regulated firms had until 29 July 2026 to enrol.
Who Now Has To Check You
The most important thing to understand is that the obligations attach to services, not job titles. A solicitor does not carry AML obligations across their entire practice simply because they are admitted. The obligation attaches when they provide a specific listed service.
| Who | The service that triggers it | Whose ID they check |
|---|---|---|
| Selling agent | Brokering the sale, purchase or transfer of real estate | Both the buyer and the seller |
| Buyer's agent | Brokering the purchase on your behalf | Both parties to the deal |
| Developer selling direct | Selling house and land, off the plan, or subdivided lots without an agent | Both parties |
| Conveyancer | Assisting a client to buy, sell or transfer real estate | Only their own client |
| Solicitor | Property transfers, holding or managing client money, forming entities | Only their own client |
| Accountant | Managing client funds, forming or restructuring entities | Their own client |
| Lender | Making a loan (regulated since 2006, nothing new here) | The borrower |
That table explains the duplication people are complaining about. The real estate agent's customer is both the buyer and the seller, because they brokered the transaction between them. Your conveyancer, by contrast, only checks the client they act for.
So if you are buying a house, you can quite legitimately be verified by the selling agent, by your own conveyancer or solicitor, by your buyer's agent if you used one, and by your lender. Four checks, four businesses, one you.
One useful clarification: routine property management and residential leasing are not the target of this reform. The designated service is brokering a sale, purchase or transfer. Your managing agent collecting rent is a different thing.
What You Will Be Asked For
For an individual, expect the standard set:
- Full name, date of birth and residential address
- A primary photographic document, usually a passport or driver licence
- Verification against a reliable and independent source, which in practice usually means an electronic check
- For companies and trusts, the ownership structure and the beneficial owners, meaning the real humans behind the entity
- For higher risk matters, questions about source of funds or source of wealth
That last one is the genuinely new experience for most people. Being asked "where did the deposit come from" feels intrusive when you have done nothing wrong. It is a legal requirement on them, applied according to risk, and a gift from a parent or a released term deposit is an entirely ordinary answer.
Firms also have to screen against sanctions lists and politically exposed person lists, keep records for seven years, and report suspicious matters to AUSTRAC. They are not permitted to tell you if they have filed a suspicious matter report.
When You Will Be Asked
The default rule is that the check happens before the designated service is provided. For a buyer's agent, that means before they start searching for you. For a selling agent, that means at listing, not after the property is under offer.
There is a sensible exception. Where completing the check first would disrupt the ordinary course of business, delayed initial customer due diligence is available. The obvious case is an auction, where the gap between the fall of the hammer and signing the contract is far too short to run checks on a buyer nobody knew would win.
The distinction that matters is whose check can be delayed. Each firm must verify its own client upfront. It is the other party to the transaction whose check can wait, and where that delay is used it must be completed within 15 days of the exchange of contracts, or before settlement, whichever comes first. So if you are the buyer, your own conveyancer will want you verified early, while the selling agent may not get to you until after contracts are exchanged.
If you are bidding at auction, this is worth planning for. Arriving with your identification already sorted removes one point of friction from a process that has plenty. Our guide on approaching auctions carefully covers the rest of that ground.
The State By State Picture
This is where a lot of published commentary gets muddled, so it is worth being precise.
The AML obligation itself is Commonwealth law and it is identical in every state and territory. There is no NSW version of customer due diligence and no Queensland exemption. AUSTRAC is a federal regulator and the AML/CTF Act applies uniformly nationwide.
What genuinely does vary by state is who performs the work, and therefore who ends up asking you for documents and which body hears a complaint about the fee.
| State or territory | Who typically handles conveyancing | Who regulates the fee complaint |
|---|---|---|
| NSW | Licensed conveyancers and solicitors | NSW Fair Trading; Legal Profession Uniform Law for solicitors |
| Victoria | Licensed conveyancers and solicitors | Consumer Affairs Victoria; Uniform Law for solicitors |
| Queensland | Solicitors only, no separate conveyancer licence | Queensland Law Society and the state legal regulator |
| ACT | Solicitors only, or staff under a solicitor's certificate | ACT legal regulator |
| South Australia | Licensed conveyancers and solicitors | Consumer and Business Services |
| Tasmania | Licensed conveyancers and solicitors | Consumer, Building and Occupational Services |
| Northern Territory | Licensed conveyancers and solicitors | NT Consumer Affairs |
| Western Australia | Settlement agents and solicitors | Consumer Protection WA; Uniform Law for solicitors |
There is a second state-level wrinkle that matters for the fee argument. Long before tranche 2, electronic conveyancing already required your conveyancer or solicitor to verify your identity under the Verification of Identity Standard in Schedule 8 of the Participation Rules, made under the Electronic Conveyancing National Law and modelled on the ARNECC Model Participation Rules. If you have bought property through PEXA in the last several years, you have already been through a formal identity check.
That is important context. For a conveyancer, AML customer due diligence is not an entirely new activity. It is a broader obligation layered on top of an identity check they were already doing and already costing into their fee. A firm presenting the whole thing as a brand new cost has some explaining to do.
The Fee Question
Here is the part worth reading twice.
There is no government AML levy on your transaction
AUSTRAC funds part of its work through an industry contribution levy, but it falls on medium and large reporting entities, and tranche 2 entities were not subject to the 2025-26 industry contribution at all. There is no per-transaction government charge being collected from you.
If anyone describes a fee on your settlement statement as a government levy, a government charge or an AUSTRAC fee, that description is wrong. It is the firm's own charge.
What the penalties actually are
Firms are, fairly, nervous. Under the AML/CTF Act the maximum civil penalty is 100,000 penalty units for a body corporate and 20,000 penalty units for an individual.
Almost every article you will read quotes this as "up to $31.3 million". That figure is well out of date. The Commonwealth penalty unit rose to $364 on 1 July 2026 under the indexation formula in section 4AA of the Crimes Act 1914. At that value the true maxima are approximately $36.4 million for a company and $7.28 million for an individual.
Those are theoretical ceilings for serious, systemic breaches, not the fine for a paperwork slip. But they explain why firms are taking this seriously, and a genuine compliance cost does exist.
What a firm may legitimately charge
In July 2026 the Legal Services Council published an information sheet, AML/CTF Act compliance and billing practices under the Uniform Law, setting out when AML/CTF compliance costs can be billed to a client. Its opening line is blunt: a law practice cannot automatically or indiscriminately charge AML/CTF compliance costs to a client.
The guidance splits the costs three ways.
Overheads, which should not be itemised on your bill. Compliance platform subscriptions, staff training, recordkeeping systems, preparing reports for the governing body, annual compliance reports, maintaining the firm's AML/CTF program, and the salary of a dedicated compliance officer. These are the ordinary cost of running a law practice and belong inside the firm's professional fees, not as a separate line item.
Disbursements, which may be charged. Genuine third party, per matter costs that the firm actually pays on your behalf and can accurately attribute to your file: an electronic identity verification, a sanctions or politically exposed person check, a company or beneficial ownership search from ASIC or an equivalent registry, document authentication or notarisation, an international database search, an external report.
Professional fees, which cover the firm's own time on your matter. This is the part most commentary gets wrong, and it cuts in the firm's favour. Where AML work is genuinely tied to your file, a practitioner may charge that time as professional fees: due diligence steps for your matter, a client-specific risk assessment, untangling a complex beneficial ownership structure, or preparing a source of funds analysis. The guidance notes that for the more administrative tasks, a paralegal's rate will generally be more reasonable than a solicitor's. What a firm may not do is present its own time as though it were a third party disbursement.
The suspicious matter report exception
One item sits firmly outside all of this. Preparing and lodging a suspicious matter report must be absorbed as an overhead, because it is not a service performed for your benefit. The Council goes further: billing SMR work as a disbursement on a client bill may also contravene the tipping-off prohibitions in the AML/CTF Act.
A firm that itemises an SMR on your bill has therefore arguably done two things wrong at once, and has told you something it is not permitted to tell you.
What happens if a firm gets this wrong
The Uniform Law requires a practice to disclose legal costs upfront (s. 174) and to charge no more than what is fair, reasonable and proportionate (s. 172). The consequences of ignoring that are not trivial:
- Failure to meet the disclosure requirements can render the costs agreement void.
- Charging overheads as disbursements may inflate a bill beyond what is fair and reasonable, and may amount to unsatisfactory professional conduct or professional misconduct.
There is also a point worth knowing if you are shopping around. Due diligence costs a firm incurs before you enter a retainer may only be billed if they were incurred for the purpose of providing legal services to you specifically and were clearly disclosed and agreed in advance. If you receive that disclosure and then decide not to engage the firm, it should not seek to recover those costs from you.
For scale, AML verification providers advertise per matter pricing in the tens of dollars rather than the hundreds. Treat any figure you are quoted as the start of a question rather than a fixed benchmark, and ask what the firm's provider actually charges for your file.
An important limitation
The Legal Services Council guidance binds solicitors in Uniform Law jurisdictions, which are NSW, Victoria and Western Australia. Solicitors elsewhere are covered by their own state legal profession legislation, which imposes broadly similar costs disclosure and fairness duties.
Licensed conveyancers, settlement agents and real estate agents are not covered by the Uniform Law at all. They sit under state licensing legislation and the Australian Consumer Law. For them, the constraint is the contract you signed and the general prohibition on misleading conduct, not the Council's guidance. That does not make the guidance irrelevant to a conversation with them; it makes it a persuasive benchmark rather than a binding rule.
How To Avoid Paying For The Same Check Three Times
Some duplication is genuinely unavoidable. Each reporting entity is responsible for its own compliance and remains liable to AUSTRAC if the work was not done properly, even if it outsourced the work. That is why "my agent already checked me" does not, on its own, discharge your conveyancer's obligation.
But paying separately, three times, for what is functionally the same electronic check is a different question from being checked three times. These are the practical levers.
1. Get it in writing before you sign anything. For a solicitor, the AML disbursement should appear in the costs disclosure and the retainer. Under the Uniform Law, costs disclosure is required where total legal costs are likely to exceed $750, with a short form permitted up to $3,000. For a real estate agent in NSW, an agent is not entitled to any commission or expenses unless there is a signed written agency agreement that complies with the regulations. A fee that never appeared in the agreement is a fee worth querying.
2. Use the cooling-off period on the agency agreement. In NSW, the cooling-off period on a residential agency agreement runs until 5pm on the next business day or Saturday. If an AML charge appears in the fine print after you have signed, you have a short window. Other states have their own arrangements, so check locally.
3. Ask the one question that sorts it out. "Is this a third party cost you actually paid on my file, and what did the provider charge you?" If the honest answer is a software subscription, a training cost, recordkeeping or the firm's AML program, that is an overhead and the Legal Services Council has said it belongs inside professional fees rather than on your bill as a separate item. If the answer is the firm's own time on your matter, that can legitimately be charged, but as a professional fee at a sensible rate, not dressed up as a disbursement.
4. Remember commission is negotiable, and so is everything attached to it. No legislation sets a scale for real estate commission in NSW, and the same is true across the country. An AML line item on an agency agreement is simply another term of a commercial contract you are entitled to negotiate, particularly in a market where agents are competing for your listing.
5. Reuse your documents, and expect to. You cannot compel one firm to accept another firm's report, but you can absolutely give the same certified documents to each party rather than paying for a fresh electronic verification each time. Ask each firm whether they will accept documents you provide directly.
6. Ask whether they have a reliance arrangement. This is the real mechanism, and it is worth understanding properly.
Can One Party's Report Be Passed To Another?
Yes, but not casually, and the conditions are strict enough that you should not assume it will happen.
The AML/CTF Act permits a reporting entity to rely on customer identification carried out by another reporting entity, but only under a written customer due diligence arrangement. The relying entity must have reasonable grounds to believe the other party has appropriate systems and controls, and under the reformed model that belief must be reassessed on an ongoing basis rather than set once and forgotten. Arrangements that predate 1 July 2026 had to be reviewed against the new requirements.
Critically, liability does not transfer. If the other firm's work was inadequate, the firm that relied on it answers to AUSTRAC. AUSTRAC's own position on outsourcing is direct: you remain liable if the work is not undertaken properly.
There is also a privacy dimension. Your identity documents are personal information. A firm handing your verification file to another business needs a proper basis and appropriate confidentiality controls, which is another reason many will simply run their own check rather than accept someone else's.
The honest summary: an agency and a conveyancing firm that regularly work together can lawfully set up a reliance arrangement, and asking whether they have one is a completely reasonable question. But a firm declining to accept another party's report is not being obstructive or gouging you. It is usually the correct compliance answer.
Where This Sits With Your Home Loan
The finance side of a property purchase has been inside the AML regime since 2006. Lenders have always been reporting entities, which is why a loan application has always involved identity verification. Nothing about tranche 2 changes the ID requirements on your mortgage.
What it does change is the shape of your timeline. Four parties now need to verify you, several of them early in the process, and a delayed check must be resolved before settlement. Identity documents that are expired, a name that does not match across documents, or an unexplained deposit are all now capable of causing friction at a point in the transaction where you have very little slack.
The practical response is unglamorous: get your documents current and consistent before you start, not after you find a property.
If you want to know what you can borrow before any of this begins, our borrowing power calculator and mortgage repayment calculator will get you a realistic figure, and the stamp duty calculator will handle the government charges that genuinely are set by your state.
FAQ
Do I have to pay an AML fee?
Not automatically. A genuine third party cost the firm paid on your file, disclosed and agreed in advance, may be charged as a disbursement, and time the firm spends on due diligence for your matter may be charged as a professional fee. What should not appear as a separate line item is general compliance overhead such as software subscriptions, training, recordkeeping or maintaining the firm's AML program, or anything to do with a suspicious matter report.
Is the AML fee a government charge?
No. There is no per transaction government AML charge on property. AUSTRAC's industry contribution levy falls on medium and large reporting entities, and tranche 2 entities were not subject to the 2025-26 contribution. Any AML fee on your bill is the firm's own charge.
Why is the real estate agent checking me when I am the buyer and they act for the seller?
Because the designated service is brokering the transaction, and for that purpose both the buyer and the seller are the agent's customers. Your conveyancer, by contrast, only verifies the client they act for.
Can my conveyancer just use the agent's check?
Only under a written customer due diligence arrangement, and even then the conveyancer stays liable to AUSTRAC for the quality of the work. Many firms will run their own check for that reason. You can still avoid duplicated cost by supplying the same documents to each party.
Does this apply differently in my state?
The AML obligation is Commonwealth law and is the same everywhere. What differs is who does conveyancing in your state, and which regulator you would complain to about a fee. Queensland and the ACT use solicitors rather than licensed conveyancers, and Western Australia uses settlement agents.
What happens if I refuse to provide identification?
The firm cannot lawfully provide the service. There is no discretion available to them, so refusing simply stops the transaction rather than avoiding the check.
Final Thoughts
The checks themselves are settled law and there is nothing to be gained from resisting them. Being verified by several businesses in one transaction is now simply how buying and selling property in Australia works.
The fee is a different matter, and it is one where being informed pays. Ask whether a charge is a real per matter third party cost or a repackaged overhead, insist it appears in the agency agreement or costs disclosure before you sign, and remember that nothing about a compliance obligation makes a commercial fee non-negotiable.
If a lending question comes out of any of this, contact us and we will work through it with you. There is no obligation.
Official Sources
This area is technical and firm-specific. Please rely on the primary sources rather than this summary:
- AUSTRAC - newly regulated businesses
- AUSTRAC - real estate designated services
- AUSTRAC - professional designated services
- AUSTRAC - delayed initial customer due diligence
- AUSTRAC - industry contribution levy
- Legal Services Council - AML/CTF Act compliance and billing practices under the Uniform Law (July 2026)
- Law Council of Australia - AML/CTF guidance
- Department of Home Affairs - overview of the AML/CTF Amendment Act
- ARNECC - Model Participation Rules
- NSW Fair Trading - agency agreements
This article is general information only and was prepared on 26 August 2026. It does not take into account your objectives, financial situation or needs, and it is not financial, credit, taxation or legal advice.
The obligations described here commenced on 1 July 2026 and the supporting rules and regulator guidance continue to develop. Fee practices vary between firms and between states, and the treatment of a particular charge depends on your own engagement terms. You should confirm the current position with AUSTRAC and, for any question about a specific fee, with the relevant state regulator or your own legal adviser.
Levio Pty Ltd (ACN 618 540 775) is a Credit Representative (Credit Representative Number 563108). We provide credit assistance only. We are not licensed to provide legal, financial product or taxation advice, and nothing in this article should be taken as such advice. Any credit assistance we provide is subject to a full assessment of your circumstances, and lending is subject to lender approval, terms, conditions, fees and charges.
