Australia is closing one of the largest gaps in its financial crime defences. From 1 July 2026, real estate agents, buyer’s agents, property developers, and other property professionals will be regulated under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006 for the first time. This shift — commonly known as “Tranche 2” — will change how property transactions are conducted across the country, and it has real implications for anyone buying, selling, investing in, or developing property in Australia.
At True Wealth Management, we work with clients on the full picture of their wealth — property, superannuation, and everything in between — so it’s important you understand what’s changing, why it matters, and how to prepare. This guide breaks it all down.
What Is AML/CTF Tranche 2?
Australia’s AML/CTF Act has regulated banks, casinos, and remittance providers (“Tranche 1” entities) since 2006. Tranche 2 extends the same anti-money laundering and counter-terrorism financing obligations to a new group of “gatekeeper” professions that have, until now, operated largely outside the regime.
The legal basis is the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which received royal assent on 10 December 2024 after more than a decade of delay. It brings the following professions into scope:
- Real estate agents and buyer’s agents
- Property developers selling directly to purchasers
- Conveyancers and lawyers involved in property transactions
- Accountants
- Trust and company service providers
- Dealers in precious metals and precious stones
Property has long been recognised as one of the most attractive vehicles for laundering illicit funds in Australia, and AUSTRAC (the Australian Transaction Reports and Analysis Centre) estimates that billions of dollars in illicit money flow through Australian real estate every year. Bringing property professionals under the AML/CTF regime is designed to close that gap and bring Australia into line with international standards set by the Financial Action Task Force (FATF).
Who Is Actually Captured by the Reforms?
The obligation attaches to the service provided, not just the job title. If a business provides a “designated service” with a link to Australia, it becomes an AUSTRAC reporting entity — regardless of how it describes itself.
This generally includes:
- Real estate agents and brokers acting on the sale or purchase of property
- Buyer’s agents
- Property developers who sell directly to purchasers (including off-the-plan sales)
- Online or marketplace-style platforms that go beyond passive advertising — for example, platforms that broker offers, facilitate auctions, hold deposits, or manage contracts
- Conveyancers and property lawyers
- Accountants providing certain designated services connected to property or company/trust structures
If your business is actively involved in facilitating a transaction — not simply advertising a listing — you are likely in scope.
Key Dates: The Tranche 2 Timeline
| Date | Milestone |
|---|---|
| 10 December 2024 | AML/CTF Amendment Act 2024 receives royal assent |
| December 2025 | Finalisation of Tranche 2 sector-specific AUSTRAC guidance |
| 31 March 2026 | New AML/CTF Rules commence for existing (Tranche 1) reporting entities; AUSTRAC enrolment opens for Tranche 2 entities |
| 29 July 2026 | Deadline for new Tranche 2 entities to complete AUSTRAC enrolment |
| 1 July 2026 | AML/CTF obligations formally commence for Tranche 2 entities, including real estate |
| Post-2026 | Transitional arrangements continue; international value transfer reporting requirements phase in |
Businesses providing a designated real estate service from 1 July 2026 must enrol with AUSTRAC — there is currently no general extension beyond the 29 July 2026 enrolment deadline.
What Obligations Do Real Estate Businesses Now Have?
Once registered, a business becomes a “reporting entity” and must build and maintain a genuine AML/CTF compliance framework. The core obligations mirror what banks and financial institutions have followed for years.
| Obligation | What It Involves |
|---|---|
| AUSTRAC enrolment | Register as a reporting entity before providing designated services |
| ML/TF risk assessment | Assess money laundering and terrorism financing risk based on customer types, transaction types, delivery channels, and geography |
| AML/CTF program | Develop and maintain a written program addressing identified risks, replacing the older Part A / Part B model with a single risk-based program |
| Customer Due Diligence (CDD) | Identify and verify customers before providing a service; low-risk clients may qualify for Simplified Due Diligence, high-risk clients require Enhanced Due Diligence |
| Sanctions and PEP screening | Screen customers against sanctions lists and politically exposed persons (PEP) registers |
| Suspicious Matter Reports (SMRs) | Lodge reports with no monetary threshold within 3 business days (24 hours if terrorism financing is suspected) |
| Threshold Transaction Reports (TTRs) | Report cash transactions of A$10,000 or more within 10 business days |
| Record keeping | Retain customer identification and transaction records for 7 years |
| AML/CTF Compliance Officer | Appoint a compliance officer at management level to oversee obligations |
| Staff training | Train relevant staff to identify and manage ML/TF risk |
| Annual compliance report | Lodge an annual AML/CTF compliance report with AUSTRAC |
Tranche 1 vs Tranche 2: What’s Different?
| Feature | Tranche 1 (Banks, Casinos, Remittance) | Tranche 2 (Real Estate, Legal, Accounting) |
|---|---|---|
| Regulated since | 2006 | 1 July 2026 |
| Approx. number of entities | Established, well-resourced sector | ~70,000–90,000 newly regulated businesses |
| Typical compliance maturity | High — dedicated compliance teams | Low to emerging — many small businesses and sole practitioners |
| Core obligations | Enrolment, CDD, SMRs, TTRs, record keeping | Same core obligations now apply |
| Government-estimated annual compliance cost | Varies by institution size | Estimated around A$23,250 per year for a typical small business (before efficiencies from compliance software) |
Penalties for Non-Compliance
The reforms carry real teeth. Non-compliance can result in significant civil penalties, and in serious cases, criminal charges and imprisonment. Importantly, civil penalties under the AML/CTF Act can be imposed on individual directors and officers, not just the company itself — so business owners cannot treat this as a compliance issue to delegate and forget.
AUSTRAC has already demonstrated its willingness to pursue significant enforcement action against reporting entities in other sectors, and Tranche 2 entities should expect the same level of scrutiny once obligations commence.
What This Means If You’re Buying or Selling Property
If you’re a client of a real estate agent, buyer’s agent, conveyancer, or developer from 1 July 2026 onward, you should expect to be asked for:
- Certified proof of identity
- Information about the source of funds being used for the purchase
- Details of beneficial ownership if you’re buying through a trust, company, or SMSF
- Additional information if your transaction is assessed as higher risk (for example, overseas buyers, complex ownership structures, or large cash components)
This is not a sign that you are under suspicion — it is simply becoming a standard part of every regulated real estate transaction in Australia, in the same way it already is when opening a bank account.
Why This Matters for Property Investors and SMSF Trustees
Many of our clients hold investment property through more complex structures, including trusts, companies, and self-managed super funds (SMSFs). Under the new regime, real estate professionals will need to verify beneficial ownership for these structures — meaning trustees and directors should expect closer scrutiny and more documentation requests when buying or selling property through an SMSF or trust.
If you’re weighing up how to structure your retirement savings and property investments, it’s worth understanding the practical differences between fund types. Our detailed guide on <a href=”https://truewealthmanagement.com.au/smsf-vs-industry-super-fund/”>SMSF vs Industry Super Fund</a> walks through the pros, cons, costs, and compliance obligations of each approach — increasingly relevant as AML due diligence adds another layer of documentation to property transactions conducted through an SMSF.
How Real Estate Businesses Can Prepare
| Step | Action |
|---|---|
| 1 | Conduct a comprehensive ML/TF risk assessment specific to your business |
| 2 | Determine exactly which of your services are “designated services” under the Act |
| 3 | Enrol with AUSTRAC once the window opens (from 31 March 2026, by 29 July 2026 deadline) |
| 4 | Appoint a management-level AML/CTF Compliance Officer |
| 5 | Build a written, risk-based AML/CTF program |
| 6 | Implement Customer Due Diligence processes and sanctions/PEP screening tools |
| 7 | Train all client-facing staff on obligations and red flags |
| 8 | Establish record-keeping systems that meet the 7-year retention requirement |
| 9 | Review AUSTRAC’s sector-specific guidance as it is finalised through 2026 |
Many businesses are turning to specialist AML compliance software to manage these obligations cost-effectively, as manual compliance processes can be resource-intensive for small agencies and sole practitioners.
The Bigger Picture
Tranche 2 represents one of the most significant expansions of Australia’s financial crime framework since the AML/CTF Act was introduced in 2006. For everyday buyers and sellers, the changes will mostly be felt as extra identification and documentation steps during a transaction. For real estate professionals, developers, conveyancers, and accountants, it’s a fundamental and mandatory shift in how business is conducted.
Whether you’re planning a property purchase, structuring an investment through a trust or SMSF, or simply want to understand how these changes affect your next transaction, it pays to get ahead of the changes rather than be caught out by them.
Frequently Asked Questions
When do the AML/CTF Tranche 2 reforms start in Australia? Obligations commence on 1 July 2026 for real estate agents, developers, conveyancers, lawyers, accountants, and trust and company service providers.
Do I need to provide extra documents when buying a house after July 2026? Yes. Expect to provide certified ID, information on the source of your funds, and details of beneficial ownership if purchasing through a trust, company, or SMSF.
What happens if a real estate business doesn’t comply? Non-compliance can lead to significant civil penalties, and in serious cases criminal charges — with liability potentially extending to individual directors and officers, not just the business.
Does this affect SMSF property purchases? Yes. Because SMSFs involve trustees and beneficial ownership structures, real estate professionals will need to verify this information as part of standard due diligence.
