The Real Estate Institute of Queensland (REIQ) is urging the Government to adopt a more balanced and reasonable approach to the expansion of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime, than proposed in the AML/CTF Regime Amendment Bill 2024. As it stands, the Attorney-General’s Department Impact Analysis estimates the ongoing annual cost of the regime at ~$2bn per annum for the property industry. Queensland’s property industry will absorb a whopping ~$250m of that cost per annum.
REIQ CEO Antonia Mercorella, who represented Australia’s real estate professionals before a Federal Senate Committee last week, emphasised the REIQ’s support for the regime’s objectives but raised significant concerns about the impact of the laws on small business and everyday Australians buying and selling property.
“We fully support the Government’s commitment to protecting the integrity of the Australian financial system,” Ms Mercorella said.
“However, the proposed framework doesn’t fully take into account the practical challenges faced by real estate businesses—namely the lack of resources and specialised expertise needed to meet these complex compliance requirements.
“Further, the cost of compliance is unlikely to be absorbed by businesses without impacting the end price for buyers and sellers, making everyday real estate transactions more expensive for Australians.”
Ms Mercorella pointed out that large institutions, such as banks, have dedicated teams of specialists and resources to manage AML/CTF checks, due diligence and reporting requirements.
“In contrast, most real estate businesses in Queensland are small, independent operations, often with fewer than five employees, and are not equipped with the expertise or systems necessary to meet the extensive AML/CTF obligations,” she said.
“The skills, knowledge and resources needed to undertake these tasks goes far beyond the reasonable scope of a real estate professional’s training and expertise and requiring them to assume this responsibility is highly inappropriate.
“We support a legislative framework that meets the regime’s objectives and places the appropriate burden on real estate professionals without causing significant impacts, costs and delays to the facilitation of property transactions.”
Ms Mercorella said the REIQ proposes a more collaborative, technology-based approach to compliance, suggesting the development of solutions that allow real estate agents, legal professionals, and financial experts (tranche 2 entities) to share and rely on information.
This model would streamline and enhance the compliance process, reduce duplication and keep costs down.
“We propose a solution where real estate agents play an active role in the AML/CTF process undertaking reasonable tasks that include verification of identity and suspicious behaviour monitoring and reporting,” Ms Mercorella said.
“Meanwhile, more complex and highly technical tasks, such as source of funds or source of wealth checks and Politically Exposed Persons (PEP) identifications, should be left to legal practitioners and accountants.
“We believe that this approach offers a more balanced solution, one that achieves the desired objectives of the AML/CTF regime without placing unreasonable expectations on real estate professionals or compromising the efficiency of property transactions.”
The REIQ remains committed to supporting the Government’s efforts to combat money laundering and terrorism financing, but insists that a more pragmatic, resource-supported approach be adopted to ensure the real estate sector can continue to operate smoothly and securely.
