Benefits of reforms "underwhelming and unproven," says peak body head
Proposed reforms to Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws would make the country’s real estate system more complex and expensive for home buyers to navigate, according to the Real Estate Institute of Australia.
On Thursday, the Attorney-General’s Department announced the opening of public consultation on the proposed reforms to the existing AML/CTF regime. The reforms would expand existing laws to capture additional “high-risk” entities, including lawyers, accountants and real estate agents.
The reforms also aim to modernise the AML/CTF regime in line with international standards and harden Australian businesses and sectors against exploitation by organised crime.
However, REIA president Hayden Groves said the proposals would increase regulation and cost for very little community benefit.
“The Australian government’s response to the inquiry into the efficacy of Australia's AML/CTF regime would do nothing for Australian consumers, and a comprehensive cost-benefit analysis to support the proposal must be undertaken,” Groves said. “If there are tangible benefits to be had, it is property consumers that will ultimately wear the costs. It was not that long ago when the AFP and AUSTRAC admitted that collecting surveillance information from real estate agents would not provide any additional useful information to track criminal activity.”
‘More difficult and expensive’
Groves said the proposed changes would be onerous for Australians in the property market.
“As if buying a house is not challenging enough in Australia in 2023, the government wants it to be even more difficult and expensive for both home buyers and sellers,” he said. “The Australian government is now saying home buyers will have to go through additional identity checks and have their real estate transactions supervised by both the Australian Federal Police and AUSTRACt to prove that you are not a money launderer when you are simply trying to buy a home.”
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REIA said that the proposals would effectively turn real estate agents into “a quasi-workforce for the AFP and AUSTRAC”.
“Obviously, if suburban real estate agents are now required to report every home buyer to authorities and do the AFP and AUSTRAC’s job for them, this cost will ultimately be worn by those involved in the transaction,” he said. “This will increase affordability challenges for Australians by increasing transaction costs. We need less red tape, not more.”
Benefits ‘underwhelming and unproven’
Groves said the proposals’ potential downsides outweighed the positives.
“Whilst the intent is understood, the benefits are underwhelming and unproven,” he said. “There are already many identity checks through the conveyancing and financing of real estate purchases. These should be utilised before imposing unnecessary costs on buyers, sellers and the agents that represent them.”
This isn’t the first time REIA has spoken out against proposals to tighten Australia’s anti-money laundering laws. The organisation also warned a 2021 government inquiry that tighter AML/CTF legislation could burden the real estate sector.
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