As Michael Janda noted earlier, Australia’s largest real estate network, the Ray White Group, is on the front foot about new anti-money laundering rules, which will cover real estate agents, accountants and lawyers (amongst others) from July 1.
The laws are called “Tranche 2” and require professionals who provide designated services, such as accountants, real estate agents and rare gem dealers, to know their clients, including appropriate identity checks, and to also report suspicious transactions to AUSTRAC (the federal anti-money laundering agency).
We were a bit of a lagger.
Out of more than 200 countries, Australia has been alongside China, Haiti, Madagascar and the United States in not regulating Tranche 2 entities.
Ray White is both large and sophisticated, so it can deal with the change. Here’s what they’ve said about it:
“The complexity of property deals, often involving hidden corporate structures, overseas funds, or undisclosed trusts, has made it an attractive pathway for dirty money,” Ray White agency compliance manager Shaun Doyle said in a press release.
“One in four property transactions are being paid for in cash and mortgage-free, which is a statistic the authorities are very interested in.”
But is the rest of the industry ready?
The days of suitcases full of cash are over, the law says.
When it was still up in the air, the real estate industry was not a fan of the reforms.
Speaking to me in 2024, then Real Estate Institute of Australia president Leanne Pilkington said the draft legislation left some questions unanswered.
“Tranche 2 is all about activating the small business community to be the extended workforce for AUSTRAC and the Australian Federal Police to do their jobs effectively,” she argued.
Speaking before the full details of the announcement were available, Ms Pilkington noted that substantial investment and training would be needed.
“The regulatory creep from the Albanese government across all portfolios is growing and creating more pain points when you consider anti-money laundering reforms, privacy reforms and cybersecurity reforms.
“Where is the collective cost-benefit [analysis] on the mum and dad business sector for this?”