AUSTRAC Tranche 2: the complete guide for real estate agencies

Quick answer

From 1 July 2026, every Australian real estate agency that brokers property sales must comply with anti-money laundering laws for the first time. The AML/CTF Amendment (Tranche 2) Act 2024 has passed; the deadline is firm. Agencies must enrol with AUSTRAC, build a written AML/CTF program, verify client identity (CDD), screen for sanctions and PEPs, lodge suspicious matter reports, retain records for 7 years, and train staff. AML Simple covers all seven obligations — most agencies complete the core setup in under an hour.

Key facts

1 July 2026 is the commencement date — all AML/CTF obligations begin on this date for real estate agencies under the AML/CTF Amendment (Tranche 2) Act 2024. AUSTRAC has confirmed it will not be extended.
Seven obligations apply — enrolment, written AML/CTF program, customer due diligence, sanctions/PEP screening, suspicious matter reports, 7-year record retention, and staff training.
Penalties reach A$33.5 million per contravention for a body corporate. Each failure to complete CDD, file an SMR, or keep records is a separate contravention (AML/CTF Act 2006, ss 175–186).
Rental-only agencies are out of scope — the obligation applies only to businesses that broker property sales; property management and leasing are not designated services.
Enrolment deadline is 29 July 2026 — you must notify AUSTRAC of your compliance officer by this date, though obligations commence 1 July 2026.
The Government's own Regulatory Impact Statement estimated first-year compliance costs at A$28,650 per agency for manual compliance processes.
FATF identified Australian real estate as a significant money laundering vulnerability, driving the Tranche 2 reforms — AUSTRAC has stated enforcement will be active from day one.
AML Simple covers all seven obligations — from AUSTRAC enrolment via ABN lookup through to ongoing CDD, screening, SMR drafting, and record retention.

On 1 July 2026, every real estate agency in Australia that brokers property sales will become subject to anti-money laundering and counter-terrorism financing laws for the first time.

This is not a proposal or a consultation. The AML/CTF Amendment (Tranche 2) Act 2024 has passed. The deadline is firm. AUSTRAC has stated publicly that it will not be extended. And AUSTRAC's penalties — up to A$33.5 million per contravention for a body corporate — are not theoretical: the regulator has a track record of enforcement action in sectors that failed to take their obligations seriously.

The good news is that the compliance framework for real estate agencies is workable. Small agencies with straightforward residential sales businesses can be substantially compliant before July with focused effort. This guide explains what that effort requires.

The fastest path to compliance

For a small agency with standard residential sales, three steps cover the core obligations — around 22 minutes from start to finish:

Sign up to AML Simple — around 2 minutes. Enter your ABN and your agency details are pre-filled from the ABR.
Enrol with AUSTRAC — around 5 minutes. The AML Simple enrolment workflow pre-fills every field from your agency profile using ABN lookup.
Generate your AML/CTF program — around 15 minutes. AML Simple's program generator produces a document consistent with AUSTRAC's Program Starter Kit structure, ready for senior management sign-off.

The remaining obligations — CDD, screening, staff training, ongoing record keeping — are built into the platform and can be set up progressively from there.

Not sure where your agency stands right now? Run the free compliance check — it takes under 3 minutes and shows you exactly which obligations you still need to address.

Who Tranche 2 applies to

Tranche 2 applies to any business that provides designated services related to real property transactions in Australia as part of a real estate business.

The designated service is specifically: buying or selling real property on behalf of another person.

This means:

Sales agents: Yes, whether residential or commercial
Buyer's agents: Yes, when buying on behalf of a client
Property managers who broker sales: Yes, for the sale component
Developers selling their own property: Generally not — the obligation applies to the agent, not the developer
Rental-only agencies with no sales: Not in scope, provided they genuinely do not broker property sales

If your agency does any volume of property sales — even occasional — you are in scope. The obligation is not limited to your primary business activity.

Source: AML/CTF Act 2006, s 6, Schedule 1, item 54A

The seven obligations every agency must meet

Obligation 1: Enrol with AUSTRAC

Before you can commence any obligations, you must enrol as a reporting entity with AUSTRAC. This is done through AUSTRAC Online and requires your ABN, your business details, and the details of your designated service.

Enrolment deadline: You must enrol before commencing your first designated service after 1 July 2026. There is no benefit in waiting — enrol now.

After enrolment: You will receive an AUSTRAC Account Number (AAN). Keep this — it is referenced in your compliance documents, and AUSTRAC uses it to identify you for all subsequent regulatory interactions.

AML Simple's enrolment tool uses ABN lookup to pre-fill your entity name, trading names, and business address directly from the Australian Business Register, cutting the form-filling time significantly.

Source: AML/CTF Act 2006, s 6A; AUSTRAC enrolment guidance

Obligation 2: Build and maintain an AML/CTF program

Your AML/CTF program is the written document that governs how your agency identifies and manages money laundering and terrorism financing risk. It covers your risk assessment, governance structure, Compliance Officer, CDD procedures, screening obligations, training approach, record keeping, and how you review the program over time.

You must have your program in place before commencing obligations on 1 July 2026.

The 2026 reforms removed the old Part A / Part B structure requirement. Your program can be organised however you choose — what matters is that it covers all required components and is appropriate for your agency's size and complexity.

Source: AML/CTF Act 2006, s 81; AUSTRAC program guidance

Obligation 3: Conduct customer due diligence (CDD)

From 1 July 2026, you must verify the identity of every buyer and seller before providing a designated service. This applies to all client types: individuals, companies, trusts, and other entities.

Key CDD requirements:

Collect full name, date of birth, and residential address for individual clients
Verify identity against government-issued photo ID or through electronic verification
For company and trust clients, identify the beneficial owners — the real people who own or control the entity
Apply enhanced CDD for higher-risk clients (PEPs, unusual transaction structures, high-risk jurisdictions)
Complete CDD before the designated service commences — not at settlement

Source: AML/CTF Act 2006, s 34; AUSTRAC CDD guidance

Obligation 4: Screen clients against the DFAT Consolidated Sanctions List

Before providing a designated service, you must screen every client against the DFAT Consolidated Sanctions List — the list of individuals and entities subject to Australian autonomous sanctions. You must also identify Politically Exposed Persons (PEPs) and manage their elevated risk.

Screening must continue on an ongoing basis. The DFAT list is updated daily, and clients who were clear at onboarding may appear on the list later.

Source: Autonomous Sanctions Act 2011; DFAT sanctions guidance

Obligation 5: Submit Suspicious Matter Reports (SMRs) and Threshold Transaction Reports (TTRs)

SMRs: When you suspect, or have reasonable grounds to suspect, that a transaction involves money laundering or terrorism financing, you must lodge a Suspicious Matter Report with AUSTRAC.

Deadlines: 24 hours for terrorism financing; 3 business days for other suspicious activity. The tipping-off prohibition means you cannot tell the subject of the report that you have filed one or are considering doing so.

TTRs: When your agency handles A$10,000 or more in physical currency in a single transaction (or multiple related transactions), you must lodge a Threshold Transaction Report. Deadline: 10 business days.

Source: AML/CTF Act 2006, ss 41–43

Obligation 6: Maintain records for 7 years

All AML/CTF records must be retained for a minimum of 7 years. This includes:

CDD records (identity documents, verification outcomes)
Sanctions and PEP screening records
Transaction monitoring records
SMR and TTR copies (subject to strict confidentiality rules)
Staff training records
Program documents and all versions
Independent review reports

Records must be accurate, complete, and retrievable. You must be able to produce them if AUSTRAC requests them.

AML Simple stores all records generated through the platform automatically for the required 7-year period.

Source: AML/CTF Act 2006, ss 107–112

Obligation 7: Train your staff

Every staff member who performs an AML-relevant duty must receive training before commencing those duties, and at ongoing intervals appropriate to your agency's risk profile.

Training must cover: what AML/CTF obligations are, how to conduct CDD, how to recognise red flags, how to escalate concerns, and the tipping-off prohibition. Records of training completion must be retained for 7 years.

Source: AML/CTF Act 2006, s 26F(4)(e)

Key dates for 2026

Date	Requirement
Now	Begin building your AML/CTF program and enrolling with AUSTRAC
1 July 2026	All AML/CTF obligations commence. You must be enrolled, your program must be in place, and CDD must begin for all new client engagements.
29 July 2026	Compliance Officer details must be notified to AUSTRAC
31 December 2026	Deadline for AML/CTF compliance officer training (for those appointed before 1 July 2026)
30 June 2029 – 31 December 2030	First independent program review (date varies by AUSTRAC Account Number)

The penalties for non-compliance

AUSTRAC's penalties for non-compliance with AML/CTF obligations are among the most severe in Australian regulatory law.

Civil penalties:

Up to A$33.5 million per contravention for a body corporate
Up to A$6.7 million per contravention for an individual
Each failure to file an SMR, each failure to complete CDD, each failure to maintain a program, each failure to keep records — each is a separate contravention

Criminal penalties:

For deliberate contravention (knowingly failing to lodge an SMR, for example): up to 20 years imprisonment for individuals

Infringement notices: For minor contraventions, AUSTRAC may issue infringement notices without court proceedings — fines of A$13,320 per notice for a body corporate.

Source: AML/CTF Act 2006, ss 175–186; AUSTRAC enforcement approach

The compliance checklist: where is your agency right now?

Run through these questions to assess your current readiness:

Enrolment:

Have you enrolled with AUSTRAC as a reporting entity?
Do you have your AUSTRAC Account Number (AAN)?

Program:

Do you have a documented AML/CTF program?
Does it cover all 12 required components?
Has it been reviewed and signed off by senior management?
Have you named a Compliance Officer and notified AUSTRAC?

CDD:

Do you have a documented CDD process for individual buyers and sellers?
Do you have a documented process for company and trust clients?
Are you conducting CDD before the designated service commences?

Screening:

Do you have a tool or process for DFAT Consolidated Sanctions List checks?
Do you ask the PEP question at client onboarding?
Do you have a process for ongoing (not just at-onboarding) screening?

Reporting:

Does your program describe when and how to lodge an SMR?
Does your program describe the tipping-off prohibition?
Does your program describe TTR obligations?

Training:

Have you trained all AML-relevant staff?
Are training records being kept?

Records:

Are CDD records being retained in a system that meets the 7-year requirement?
Are screening records retained?

If you answered "no" or "unsure" to five or more of these questions, your agency needs to accelerate its preparation. The July deadline does not adjust for agencies that start late.

Want a personalised gap analysis? Run the free AML Simple compliance check — it walks through every obligation and shows exactly where you stand.

Why July 2026 is real estate's compliance moment

Australia's property market has long been identified by international bodies — including the Financial Action Task Force (FATF) — as a significant vulnerability in the country's AML/CTF framework. The Tranche 2 reforms are Australia's response to sustained international pressure to extend AML obligations to the "professional enablers" of money laundering — lawyers, accountants, and real estate agents.

AUSTRAC has been clear that it views the real estate sector as high-risk. The regulator has also been clear that it will not repeat the experience of Tranche 1 (the original 2006 reforms), where years passed before enforcement action was taken and the sector gradually took compliance seriously.

AUSTRAC's stated enforcement approach for Tranche 2 is to be active from day one. This is not a warning period. Agencies that have not enrolled, have no program, and are conducting no CDD by 1 July 2026 will be at real risk of enforcement action.

What "substantially compliant" looks like by 1 July 2026

For a small residential sales agency:

Enrolled with AUSTRAC (AAN obtained)
AML/CTF program in place — covering all required components, signed off by the principal, version-dated
Compliance Officer named — typically the principal for small agencies; details submitted to AUSTRAC
CDD process in place — a system (manual or automated) for collecting and verifying client identity before taking listings and acting for buyers
Sanctions screening process in place — a tool or checklist for DFAT checks at onboarding and at regular intervals
Staff briefed on AML obligations — a documented briefing that covers the basics, even if full formal training is ongoing
Record-keeping system in place — somewhere that CDD documents and screening results are stored and dated, with a retention plan

This is not a perfect program. It is a genuine one. A regulator reviewing an agency with this foundation in place on 1 July is far less likely to take enforcement action than one reviewing an agency with no program, no CDD process, and no records.

AML Simple is designed to get a small agency to this point in under an hour. See the features overview and current pricing — there are no volume caps on compliance checks.

FAQ

What are real estate agents' AML obligations from 1 July 2026?

From 1 July 2026, Australian real estate agents who broker property sales must meet seven obligations under the AML/CTF Amendment (Tranche 2) Act 2024: (1) enrol with AUSTRAC; (2) build and maintain a written AML/CTF program; (3) conduct customer due diligence on all buyers and sellers; (4) screen clients for sanctions and PEPs; (5) lodge Suspicious Matter Reports for suspicious transactions; (6) retain all AML records for 7 years; and (7) train relevant staff. All obligations commence simultaneously on 1 July 2026.

What is AUSTRAC Tranche 2?

AUSTRAC Tranche 2 is the second wave of Australia's AML/CTF reforms, introduced by the AML/CTF Amendment (Tranche 2) Act 2024. Tranche 1 (2006) covered financial services, gambling, and bullion. Tranche 2 extends the same framework to real estate agents, lawyers, accountants, and other professional services. The reforms respond to sustained criticism from the Financial Action Task Force (FATF), which identified Australia's failure to regulate these sectors as a major weakness in the country's AML/CTF framework. Real estate obligations commence 1 July 2026.

Do real estate agents need AML compliance in Australia?

Yes — from 1 July 2026. The AML/CTF Amendment (Tranche 2) Act 2024 makes real estate agencies that broker property sales "reporting entities" under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. There are no exemptions for small agencies, sole traders, or agencies with a low volume of sales. Rental-only agencies that conduct no property sales are not in scope. The obligation applies nationwide — it is not state-by-state.

What happens if a real estate agent doesn't comply with AUSTRAC?

Non-compliance triggers civil penalties of up to A$33.5 million per contravention for a body corporate (A$6.7 million for individuals). Every individual failure — each CDD not completed, each SMR not lodged, each record not kept — is a separate contravention. Deliberate contravention can also bring criminal penalties including up to 20 years imprisonment. AUSTRAC has publicly stated that enforcement will be active from day one, unlike the soft approach taken after Tranche 1 in 2006. Source: AML/CTF Act 2006, ss 175–186.

What is the AUSTRAC Tranche 2 real estate deadline?

1 July 2026 — all AML/CTF obligations commence on this date. Real estate agencies must be enrolled with AUSTRAC, have a written AML/CTF program signed off by senior management, and have their CDD and screening processes operational from this date. A second deadline applies to Compliance Officer notification: agencies must formally notify AUSTRAC of their Compliance Officer by 29 July 2026. AUSTRAC has confirmed no extension will be granted.

Who does AUSTRAC Tranche 2 apply to in real estate?

Tranche 2 applies to any business that brokers the purchase, sale, or transfer of real property on behalf of another person as part of a business. Residential sales agents, commercial sales agents, buyer's agents, and property managers who also conduct sales are all in scope. Property developers selling their own stock, rental-only property managers, and mortgage brokers (who are already regulated under Tranche 1) are not in scope under the real estate designated service definition. Source: AML/CTF Act 2006, Schedule 1, item 54A.

How long does it take to set up AML compliance for a real estate agency?

With AML Simple, the core compliance foundations — AUSTRAC enrolment, AML/CTF program, CDD setup, and screening — can be in place in under an hour. Without a tool, agencies typically spend several days researching obligations, drafting a program from scratch, and building manual checklists. The Government's Regulatory Impact Statement estimated 70+ hours of staff time for manual first-year compliance. Run the free compliance check to see exactly what your agency still needs to do.

What is an AML/CTF program for a real estate agency?

An AML/CTF program is the written document that governs how your agency identifies and manages money laundering and terrorism financing risk. It must include: a risk assessment of your clients, products, and transaction channels; your governance structure and Compliance Officer; CDD procedures for all client types; screening obligations; staff training approach; record-keeping practices; and how you will review the program over time. The AML/CTF Act 2006 (s 81) requires the program to be in place before commencing obligations on 1 July 2026.

What is customer due diligence in real estate?

Customer due diligence (CDD) means verifying the identity of every buyer and seller before providing a designated service. For individuals: collect full name, date of birth, and residential address, and verify against government-issued photo ID or electronic verification. For companies and trusts: also identify the ultimate beneficial owners. CDD must be completed before the agency commences the designated service — not at settlement. Enhanced CDD applies to politically exposed persons and other high-risk clients. Source: AML/CTF Act 2006, s 34.

How much does AUSTRAC Tranche 2 compliance cost a small agency?

The Government's Regulatory Impact Statement estimated first-year compliance costs at approximately A$28,650 for a small real estate agency using manual processes. AML Simple reduces this significantly — agencies pay from A$79/month with no volume caps on compliance checks. See AML Simple pricing for current rates. For a detailed cost comparison including the tool-versus-consultant calculation, the AML compliance cost guide breaks down where the savings come from.