AML/CTF Tranche 2 Reforms: What Australian Real Estate Agents, Developers & Conveyancers Need to Know

What is AML/CTF Tranche 2?

Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act has regulated banks, casinos, and remittance providers since 2006. Those businesses are "Tranche 1."

Tranche 2 extends these same laws to a new group of professions — specifically real estate agents, conveyancers, lawyers, accountants, and trust and company service providers. The Australian Government passed the legislation in late 2024 after more than a decade of delays, and the obligations take effect on 1 July 2026.

Why? Because property is one of the most common vehicles for money laundering in Australia. AUSTRAC (the Australian Transaction Reports and Analysis Centre) estimates that billions of dollars in illicit funds flow through Australian real estate every year. By bringing property professionals under the AML/CTF regime, the government aims to close one of the biggest gaps in Australia's financial crime defences.

In practical terms, this means that from 1 July 2026, if you sell, buy, auction, convey, or develop property in Australia, you will need to:

Enrol with AUSTRAC as a "reporting entity." Know who your customers are (customer due diligence). Screen them against sanctions and politically exposed persons lists. Report anything suspicious. Keep records for 7 years. Train your staff. And have a written AML/CTF program in place.

This is not optional and it's not something you can defer. The penalties are serious — up to $2.2 million for businesses and up to 10 years imprisonment for individuals.

Who Is Affected by AML/CTF Tranche 2?

Tranche 2 applies to any business in Australia that provides a "designated service" under the amended AML/CTF Act. For property professionals, this includes:

Real estate agents

If you list, sell, buy, auction, or manage the sale of real property — residential or commercial — you're covered. This includes sales agents, buyer's agents, auctioneers, and real estate agencies of any size. A sole agent with 3 listings a month has the same obligations as a large franchise group.

Conveyancers and settlement agents

If you facilitate the legal transfer of property ownership, you're covered. This includes licensed conveyancers, settlement agents, and property lawyers acting in a conveyancing capacity.

Property developers

If you develop and sell residential or commercial property — including off-the-plan sales — you're covered. This applies whether you sell through agents or directly.

Accountants and tax agents

If you prepare financial reports, manage trust accounts, or provide financial advice in connection with property transactions, you may also be captured. The scope for accountants extends beyond property, covering trust and company services, tax structuring, and financial planning.

Lawyers

Lawyers providing designated services — conveyancing, trust and company formation, managing client funds — are also covered. However, legal professional privilege protections apply in certain circumstances.

If you're unsure whether your business is affected, AUSTRAC has published an online eligibility checker that takes about 2 minutes.

What Are the Key Dates for Tranche 2?

The window between enrolment opening (31 March) and obligations going live (1 July) is only 3 months. If you wait until enrolment opens to start preparing, you'll be scrambling. The time to start is now.

Your 8 obligations under Tranche 2

Once your obligations commence on 1 July 2026, you must comply with all of the following. AUSTRAC's reforms guidance explains each in detail. These aren't optional "nice to haves" — each one is a legal requirement with its own penalty for non-compliance.

What Are the Penalties for Non-Compliance?

AUSTRAC has significant enforcement powers and has shown it's willing to use them. The penalties under the AML/CTF Act are designed to be proportionate to the harm caused by money laundering — which means they're severe.

It's worth noting that "I didn't know" is not a defence. The obligation is strict — you must have systems in place regardless of whether you've actually encountered money laundering. AUSTRAC can (and does) penalise businesses for systemic failures even when no actual laundering has occurred.

What's Different for Property Professionals?

While the core obligations are the same as for banks, property transactions have unique characteristics that affect how you comply. Here are the property-specific issues you need to understand:

Auction-day delayed CDD

At auction, you can't verify a buyer's identity before the hammer falls — that would disrupt the sale. AUSTRAC recognises this with a "delayed CDD" provision. You can complete verification after the designated service begins, but must do so "as soon as practicable." In practice, this means within 20 business days for auction buyers and 15 business days for exchange buyers. Note: these are business days, not calendar days — weekends and public holidays don't count.

Cash threshold transactions

If a customer pays you $10,000 or more in physical cash (notes and coins, not electronic transfers), you must file a Threshold Transaction Report (TTR) with AUSTRAC within 10 business days. This applies to deposits at open homes, cash payments at your office, or any physical currency you receive. If the cash is deposited directly into your bank account, the bank files the TTR — not you.

Tipping-off is a criminal offence

If you file a Suspicious Matter Report about a customer, you cannot tell the customer (or anyone outside your compliance team) that you've done so. This is called "tipping off" and it's a criminal offence. Your agents should never see SMR details, sanctions match alerts, or compliance trigger information — only behavioural descriptions of what they observed.

Trust structures require deeper diligence

Property transactions frequently involve trusts — family trusts, discretionary trusts, unit trusts, self-managed super funds. For each trust, you must identify the trustee, settlor, appointor (if any), and beneficial owners or beneficiaries. Discretionary trusts are rated high risk by AUSTRAC's National Risk Assessment, meaning Enhanced CDD may be required.

Both sides of the transaction

Unlike banks (who only deal with their own customers), property professionals deal with both buyers and vendors. You need CDD on the buyer, the vendor, and potentially their associated entities (companies, trusts, foreign persons). If a third party is involved (nominee purchaser, power of attorney), they need verification too.

How Much Does Tranche 2 Compliance Cost?

The Australian Government's Regulatory Impact Statement estimates the average ongoing cost at $23,250 per business per year using consultants and manual processes. This includes administration time, software fees, professional services, training, and program drafting.

However, that figure assumes a traditional compliance approach — hiring an AML consultant ($5,000–$15,000 for initial setup), buying separate KYC/screening tools ($200–$500/month), and manually managing records and reporting.

With purpose-built compliance software like AMLTranche, the cost is significantly lower. A typical small-to-medium agency (5–15 staff, 10–30 transactions per month) can expect to pay $179–$299/month for a platform that covers risk assessment, program generation, CDD, screening, IDV, reporting, training, and audit trails — all in one place.

You can even generate your risk assessment and AML/CTF program for free before committing to a paid plan — no credit card, no obligation.

Your compliance checklist

Here's what you need to have in place by 1 July 2026. Use this as your planning guide:

What Should You Do Right Now?

You don't need to wait until 31 March to start. In fact, the businesses that start now will be in the strongest position when obligations go live. Here's what you can do today:

Step 1: Check if you're affected. Use AUSTRAC's eligibility checker or our free tool on AMLTranche.

Step 2: Generate your risk assessment and AML/CTF program. You can do this for free with AMLTranche — no credit card, no obligation. It takes about 15 minutes and gives you a tailored, AUSTRAC-aligned program PDF.

Step 3: Appoint a compliance officer. This is usually the principal, office manager, or a senior agent. They'll be responsible for overseeing your AML/CTF program and making compliance decisions.

Step 4: Start training your team. Even basic awareness training now means your agents know what's coming and can start identifying red flags in their daily work.

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.