Key Takeaways
- From 1 July 2026, real estate agents, property developers, and conveyancers must meet 8 core AML/CTF obligations including AUSTRAC enrolment, CDD, sanctions screening, and suspicious matter reporting
- AUSTRAC enrolment opens 31 March 2026 with a hard deadline of 29 July 2026 — only a 3-month preparation window between enrolment opening and obligations going live
- Civil penalties reach up to $2.2 million per breach for companies (or 3x the benefit obtained); criminal penalties include up to 10 years imprisonment for knowingly breaching core obligations
- Property managers, valuers, and mortgage brokers are NOT covered by Tranche 2 — only professionals involved in the sale or transfer of real property are captured
- Independent program reviews must be conducted every 3 years (first due by July 2029), with annual compliance reports and staff training refreshes required each year
In this guide
What is changing and why it matters Who must comply? A sector-by-sector breakdown The 8 core obligations you must meet Key dates you cannot miss What happens if you don't comply How to get started today Frequently asked questionsWhat Is Changing and Why It Matters
Australia's Anti-Money Laundering and Counter-Terrorism Financing Act 2006 has regulated banks, casinos, and remittance providers for nearly two decades. These financial sector businesses fall under what's known as "Tranche 1." Now, the Act is expanding significantly.
Tranche 2 brings real estate agents, property developers, conveyancers, lawyers, accountants, and trust and company service providers under the same AML/CTF regime. The legislation passed in late 2024 after more than a decade of consultation, and obligations take effect on 1 July 2026. The Attorney-General's Department has published background on the reform rationale.
The driving force behind this expansion is Australia's alignment with the Financial Action Task Force (FATF) — the global standard-setter for anti-money laundering. Until now, Australia was one of the few FATF member countries that had not extended AML/CTF rules to real estate and legal professionals. That gap placed Australia on the FATF's watch list and left the property sector exposed as a conduit for illicit funds.
Real estate has long been recognised as a high-risk sector for money laundering, both domestically and internationally. Property transactions involve large sums, can be structured through complex entity arrangements, and historically have had limited transparency requirements compared to financial services. Bringing property professionals under the AML/CTF framework closes one of the most significant remaining gaps in Australia's financial crime defences.
For a more detailed overview of what Tranche 2 is and how it came about, see our plain English guide to AML/CTF Tranche 2.
Who Must Comply? A Sector-by-Sector Breakdown
Not every professional in the property industry is captured by Tranche 2. The obligations apply specifically to those who provide a "designated service" under the amended AML/CTF Act. Here's how it breaks down across each sector.
Real Estate Agents and Buyer's Agents
If you are involved in selling, purchasing, or auctioning real property on behalf of another person, you are providing a designated service and must comply. This captures:
Selling agents — whether you're listing and selling residential homes, commercial property, rural land, or development sites. The size of your agency doesn't matter; a sole operator with a handful of listings has the same obligations as a large franchise network.
Buyer's agents — if you act on behalf of a purchaser to locate, evaluate, or negotiate the acquisition of property, you're covered. This is a growing sector, and AUSTRAC has confirmed buyer's agents fall squarely within scope. For a deeper look at buyer's agent obligations, see our guide to AML obligations for buyer's agents.
Auction houses and auctioneers — conducting an auction of real property is a designated service. The delayed CDD provisions recognise that identity verification often can't happen before the hammer falls, but it must be completed promptly afterwards.
Property Developers
Property developers are captured when they sell real property directly to buyers, rather than exclusively through agents. This includes:
Direct-to-buyer sales — if your development company sells apartments, townhouses, or land lots directly to purchasers (including off-the-plan), you are providing a designated service. This is common in house-and-land packages and large master-planned communities.
SPV structures — many developers use Special Purpose Vehicles (separate companies or trusts) for each project. Each SPV that provides a designated service must either enrol with AUSTRAC individually or form part of a reporting group. Multi-entity developers should review our guide to reporting group obligations for developers.
House and land packages — where a developer sells the land component directly and the building contract is separate, the land sale constitutes a designated service.
Conveyancers and Settlement Agents
If you plan, execute, or give instructions for a transfer of real property, you are providing a designated service. This captures:
Licensed conveyancers — whether you operate independently or within a firm, preparing and lodging transfer documents makes you a reporting entity under Tranche 2. For a comprehensive look at conveyancer-specific requirements, see our guide to AML obligations for conveyancers and settlement agents.
Settlement agents — particularly in Western Australia and other jurisdictions where settlement agents handle property transfers, these professionals are squarely within scope.
Solicitors providing conveyancing services — lawyers who undertake conveyancing work are captured for those services, though legal professional privilege protections apply in limited circumstances. The key is whether the solicitor is providing a designated service, not their professional title.
Who Is NOT Covered?
Several property-adjacent roles fall outside Tranche 2's scope:
Property managers (rental only)
If you solely manage rental properties — collecting rent, arranging maintenance, handling tenancies — you are not captured. However, if you also sell property, those sales activities are covered.
Valuers and appraisers
Property valuers providing independent valuations are not designated service providers under Tranche 2, even when their valuations relate to a property sale.
Mortgage brokers
Mortgage brokers are already regulated under Tranche 1 as financial service providers. They do not take on additional obligations under Tranche 2.
Building and construction contractors
Builders, architects, and tradespeople are not captured unless they are also selling property directly to end purchasers (which would make them a developer).
The 8 Core Obligations You Must Meet
Once your obligations commence on 1 July 2026, you must comply with all of the following. Each one is a legal requirement with its own penalty for non-compliance. Missing even one can result in enforcement action from AUSTRAC.
1 Enrol with AUSTRAC
Register as a reporting entity through AUSTRAC Online. You'll need your ABN, business structure details, a description of your designated services, and the name of your compliance officer. Enrolment opens 31 March 2026 and must be completed by 29 July 2026.
2 Appoint an AML/CTF Compliance Officer
Designate a senior person within your organisation to be responsible for AML/CTF compliance. This is typically the principal, office manager, or a senior partner. They must have the authority and resources to implement your compliance program effectively.
3 Conduct an ML/TF Risk Assessment
Assess your business's exposure to money laundering and terrorism financing risk across five dimensions: customer types, services offered, geographic factors, delivery channels, and transaction patterns. This assessment forms the foundation of your entire AML/CTF program.
4 Develop and Maintain an AML/CTF Program
Create a written, risk-based compliance program tailored to your business, following AUSTRAC's AML/CTF program guidance. It must address how you will identify and verify customers, screen against sanctions lists, monitor for suspicious activity, report to AUSTRAC, and train staff. The program must be approved by a senior officer and reviewed at least annually.
5 Customer Due Diligence (CDD)
Verify the identity of every customer before providing a designated service. Three tiers apply: simplified CDD for lower-risk scenarios, standard CDD for most transactions, and enhanced CDD for higher-risk customers such as trusts, foreign persons, and PEPs. See AUSTRAC's CDD guidance and our CDD guide for real estate agents.
6 Suspicious Matter Reporting (SMR)
If you form a suspicion that a customer or transaction involves money laundering, terrorism financing, or proceeds of crime, you must file a Suspicious Matter Report with AUSTRAC. The deadline is 24 hours for terrorism-related matters and 3 business days for all others. Tipping off the customer is a criminal offence. Read our SMR guide for property professionals.
7 Record Keeping (7-Year Minimum)
Maintain all CDD records, screening results, transaction records, SMR documentation, training records, and compliance program versions for a minimum of 7 years. Records must be accessible, accurate, and available for AUSTRAC inspection at any time.
8 Staff Training and Awareness
Train every staff member who is involved in providing designated services. Training must cover AML/CTF obligations, how to identify red flags and suspicious behaviour, internal reporting procedures, and tipping-off prohibitions. It must be role-specific, documented, and refreshed at least annually.
Key Dates You Cannot Miss
The Tranche 2 timeline is tight. Understanding these dates is critical for planning your compliance preparation. For a complete breakdown, see our detailed Tranche 2 timeline.
Tranche 2 compliance timeline
The gap between enrolment opening (31 March) and obligations going live (1 July) is only three months. If you haven't started preparing by now, there is no more time to wait. Review AUSTRAC's reforms guidance and ensure your risk assessment, AML/CTF program, CDD workflows, and staff training are in place before you enrol.
What Happens If You Don't Comply
AUSTRAC has broad enforcement powers and a track record of pursuing significant penalties — even against organisations that simply failed to have adequate systems in place, regardless of whether actual money laundering occurred. For a detailed breakdown of penalties, see our guide to Tranche 2 penalties.
Penalties for non-compliance
It's critical to understand that ignorance is not a defence. The obligation is strict liability — you must have compliant systems in place regardless of whether you've actually encountered money laundering. AUSTRAC has demonstrated a willingness to penalise systemic compliance failures even where no criminal funds were involved.
How to Get Started Today
Compliance preparation doesn't have to be overwhelming. Breaking it down into clear steps makes the process manageable, even for small practices and sole operators.
Your 5-step compliance action plan
Purpose-built compliance platforms like AMLTranche can simplify this entire process. You can generate your risk assessment and AML/CTF program, run customer due diligence with built-in identity verification and sanctions screening, manage suspicious matter reporting, maintain audit-ready records, and track staff training — all from a single platform designed specifically for Australian property professionals.
Frequently Asked Questions
Do property managers need to comply with AML/CTF Tranche 2?
No. Property managers who solely manage rental properties — collecting rent, handling maintenance, managing tenancies — are not captured by Tranche 2. The obligations apply to professionals involved in the sale or transfer of real property. However, if a property management business also operates a sales division, the sales activities are covered and the business must comply for those services.
Can I use a shared AML/CTF program across multiple offices?
Yes, with conditions. If all offices operate under the same ABN (the same reporting entity), a single AML/CTF program can cover them all. However, the program must account for the specific risks of each location — an inner-city office dealing with high-value commercial properties has a different risk profile to a regional office handling residential sales. For multi-entity structures (such as franchise groups or developers with multiple SPVs), each entity must enrol separately, but they can form a "reporting group" to share a common program framework.
What level of CDD is required for low-risk residential transactions?
For transactions you've assessed as genuinely low risk, simplified CDD may be appropriate. This still requires verifying the customer's identity, but you may use less intensive methods — for example, a single government-issued photo ID verified electronically. The critical requirement is that you document why you assessed the transaction as low risk. If risk indicators emerge during the transaction (unusual payment methods, third-party involvement, reluctance to provide information), you must escalate to standard or enhanced CDD.
Do I need to screen both buyers AND sellers?
You must conduct CDD on every person to whom you provide a designated service. For a selling agent, your primary client is the vendor, so CDD on the vendor is essential. Whether you also need CDD on the buyer depends on whether you are providing a service to them. For conveyancers acting for one party, CDD is required on that party. In practice, many agencies conduct CDD on both sides of the transaction to manage risk comprehensively — particularly given that receiving proceeds from a sanctioned person or entity carries its own legal exposure.
What if I'm already regulated under AML/CTF Tranche 1?
If you hold existing reporting obligations under Tranche 1 (for example, as a mortgage broker or financial service provider), Tranche 2 does not replace those obligations — it adds to them. You must ensure your existing AML/CTF program covers any new designated services you'll provide under Tranche 2. This likely means updating your risk assessment, expanding your program documentation, and enrolling the new designated services with AUSTRAC. The good news is that your existing compliance infrastructure gives you a meaningful head start.
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Disclaimer: This article provides general information about AML/CTF Tranche 2 obligations and does not constitute legal advice. While we've referenced official AUSTRAC guidance and the AML/CTF Act, you should confirm your specific obligations with AUSTRAC or a qualified legal adviser. AMLTranche helps streamline your compliance workflows alongside your professional advisers.