Real estate bought in your own name is not among the financial products ASIC’s licensing page names, and Moneysmart counts direct investment in real estate among the investments ASIC does not regulate. A licence starts when the talk or the work moves to the money around the property: ASIC’s guides treat suggesting, in the course of a business, a particular loan from a particular lender as credit assistance, and a property manager with power to bind the owner who buys insurance in the owner’s name as dealing in a financial product, and ASIC has warned that steering tenants towards their super may be unlicensed financial advice.
General informationThis page describes ASIC’s published guidance. Whether one conversation or arrangement needed a licence is a legal question about its facts. Moneysmart is ASIC’s consumer website, and ASIC’s professional registers show who holds which licence.
Two lists, and where a house falls
ASIC’s page for people asking whether they need an Australian financial services (AFS) licence lists what counts as a financial service. Giving financial product advice is one; dealing in a financial product is another, and ASIC’s example of dealing includes issuing interests in a managed investment scheme. Running a registered managed investment scheme is a third.
The same page gives examples of financial products: superannuation, shares and bonds, life and general insurance, derivatives, margin lending, and interests in managed investment schemes. ASIC frames the list as examples rather than a complete set, and a house or land is not among them.
Moneysmart keeps the second list, of investments ASIC does not regulate. It names crypto assets that are not financial products, precious metals, investments from overseas providers that are not licensed in Australia, and “direct investment in real estate”. It adds that many of these carry higher risk, and that you are not protected if things go wrong.
So the line this guide follows does not run around the house. It runs through the transactions that come with buying, owning and renting it out.
Five moments, five of ASIC’s rules
Each row is a moment around one purchase, with the rule or example ASIC gives for it. ASIC’s examples are its own scenarios, summarised here; real cases turn on their facts.
| The moment | What ASIC says | The licence |
|---|---|---|
| Talking about borrowing in general | In ASIC’s example, suggesting that someone think about borrowing to buy residential property, without pointing to any lender or loan, is not credit assistance. | None for that suggestion alone, on ASIC’s example. |
| Pointing to a lender or a loan | In the same example, suggesting the person go to a particular bank or finance company about a specific product is credit assistance, even if the person making the suggestion arranges nothing. | Generally an Australian credit licence, or an authorisation from a credit licensee. ASIC notes that a mere referral to a credit licensee or representative may fall under an exemption if the referrer also discloses any benefit, such as a commission. |
| Arranging the landlord’s insurance | ASIC’s scenario is a property manager with power to bind the owner who takes out insurance against lost income if the rental sits vacant, paying the premium from the rent account. ASIC says the agent has acquired general insurance, a financial product, as the owner’s agent. | An AFS licence authorising dealing on behalf of another, or authorisation from a licensee that holds one. |
| Telling tenants about their super | In 2020 ASIC told the real estate institutes it was concerned that agents advising struggling tenants to consider releasing super early may be giving unlicensed financial advice, or advice not in the tenant’s best interests. | An AFS licence, or acting as an authorised representative of a licensee. The letter says financial advice must come only from qualified, licensed financial advisers or financial counsellors. |
| Offering a stake in a scheme | Issuing interests in a managed investment scheme is ASIC’s own example of dealing, and operating a registered scheme is a financial service in itself. | An AFS licence, or authorisation under one. |
Why an investment loan sits inside the credit rules
Credit for investing is mostly outside the National Credit Code. ASIC’s guide says the Code generally does not apply to credit used for investment, such as buying shares or interests in managed investment schemes, with one exception: investment in residential property.
That exception is why the second row of the table matters for a rental purchase. ASIC’s guide also notes that engaging in credit activities without a licence is an offence under section 29 of the National Credit Act. When an estate agent passes a buyer on to a broker, a separate set of conditions applies; the guide on referrals and commissions sets them out.
ASIC’s letter of April 2020, read closely
The letter is dated 3 April 2020 and went to the real estate institute in each state. It arose from the COVID-19 measure that, as the letter described it then, let people affected by the pandemic draw up to $10,000 of their super in 2019–20 and a further $10,000 in 2020–21. That measure belongs to those two years; the letter is history, but its reasoning is not.
ASIC named two concerns. The first was that the agents’ conduct might be unlicensed financial advice, contrary to section 911A of the Corporations Act. The second was that it might not be in the tenants’ best interests, contrary to section 961B.
The letter drew the line by who was speaking: real estate agents who neither held the licence nor acted as authorised representatives of an AFS licensee. It said that pointing a tenant towards early access to super, specifically, was likely to breach the Act, and that tenants in difficulty needed sound financial guidance and possibly debt counselling. Where an agent felt a tenant needed guidance about money, ASIC suggested pointing them to the information on Moneysmart.