New AML Laws Take Effect July 1 — Why Source-of-Funds Documentation Now Matters for Every Property Buyer

Australia's expanded anti-money-laundering (AML/CTF) regime takes effect on 1 July 2026, and for the first time it draws real-estate professionals, conveyancers and a wider range of advisers into the reporting net. In practice, that means every buyer and seller of property must now verify their identity and, increasingly, demonstrate where their deposit and purchase funds came from.

What is actually changing

The so-called "Tranche 2" reforms close a long-standing gap by extending obligations that banks have carried for years to professions that handle property transactions. The headline effect for borrowers is simple: at multiple points in a purchase — not just at the bank — you may be asked to show identity documents and a clear paper trail for your funds.

• Verified ID for all parties to a transaction
• Evidence of the source of deposit and settlement funds
• Reporting of transactions that look unusual or unexplained

Why this matters for MPFG's clients

Many of the borrowers MPFG serves — recent migrants, PR holders and self-employed business owners — have legitimate but less conventional money trails: gifts from family overseas, business income drawn over several years, or savings accumulated outside the major banks. None of that is a problem. What creates friction is being unable to document it when asked.

As a non-bank lender focused on borrowers the major banks often turn away, MPFG has long emphasised genuine, well-organised documentation. The new rules make that discipline more valuable than ever. A gift should be supported by a signed letter and bank records; overseas transfers should be traceable; business income should reconcile with BAS and tax records.

Practical steps before you apply

1. Keep a clear record of where deposit funds originated, especially for overseas or family contributions.
2. Document gifts with a statutory declaration or gift letter plus matching bank statements.
3. Reconcile business income with BAS lodgements and accountant-prepared figures.
4. Start early — gathering evidence after a contract is signed adds stress and delay.

The goal of these reforms is to keep dirty money out of Australian property, not to penalise honest buyers. For well-prepared borrowers, the impact is mainly about timing and paperwork. MPFG can help structure an application so that identity and source-of-funds evidence is ready before it is requested.

This article is general information only and does not constitute legal, tax or financial advice. Requirements vary by transaction — confirm your obligations with your lawyer or conveyancer.

Source: Australian Broker, 30 June 2026.