Australia's AML/CTF Tranche 2 Reform 2026: What Property Professionals Must Do

From 1 July 2026, Australian real estate agents, buyers’ agents, and property developers become AUSTRAC reporting entities for the first time. The Tranche 2 reforms — long discussed, now scheduled — extend Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime to the property sector. Enrolment is already open. If your business brokers the sale or purchase of real estate, the clock to enrol, write a program, and start checking customers is measured in weeks, not years.

This is not a tenancy-law change and it is not a tax change. It is a financial-crime obligation that sits on top of everything else a property business already does, administered by a regulator most agencies have never dealt with. Below is what is changing, exactly who is caught (and who is not), the five obligations that apply, and the new class of records you will be keeping for the next seven years.

This article is general information about the Tranche 2 reforms, not legal or compliance advice. The obligations are detailed and carry penalties — confirm your position with AUSTRAC and a qualified AML/CTF or legal adviser before acting.

What’s changing, and when

Tranche 2 comes from the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which extends the existing Anti-Money Laundering and Counter-Terrorism Financing Act 2006 to the “gatekeeper” professions: real estate, legal, accounting, and dealers in precious metals and stones. Australia was one of only a handful of countries yet to regulate these professions, and faced the risk of being grey-listed by the Financial Action Task Force at its 2025 mutual evaluation. The property sector is squarely in scope: the Attorney-General’s Department identifies real estate as a high-risk channel for laundering money.

The dates that matter for real estate:

The sequence is the trap. The obligations switch on at 1 July 2026, but the enrolment window runs to 29 July 2026 — so a business needs its program written and its customer checks working at commencement, then completes enrolment shortly after. Treating 29 July 2026 as the date everything is due leaves no time to build the program. Confirm the current dates and any transitional relief on the AUSTRAC reform pages before you plan around them.

Who is caught, and who isn’t

This is the question every property professional is actually asking, and the answer turns on one idea: Tranche 2 follows the transfer of ownership or control of real estate, not the ongoing management of it.

Caught — providing a designated service:

• Selling agents — listing and selling residential homes, commercial property, rural land, or development sites on behalf of an owner.
• Buyers’ agents — acting for a purchaser to locate, evaluate, or negotiate the acquisition of property.
• Property developers — selling or transferring real estate they have developed directly to buyers.
• Auction and online brokering models — marketplaces and platforms that go beyond passively advertising a listing to act as an intermediary in the sale or transfer.

For real estate agents, the designated service is brokering — acting as an intermediary in the sale, purchase, or transfer. It begins when the agency or buyer’s-agent agreement is signed, so the obligation can attach even if the property never sells, and brokering a transfer with no money changing hands still counts.

What is not the agent’s designated service: preparing contracts, conducting title searches, and lodging the transfer of land are conveyancing work. They are regulated separately as a legal or conveyancing designated service — also part of Tranche 2, but with the lawyer or conveyancer as the reporting entity, not the agent.

Generally not caught:

• Routine residential property management and leasing — collecting rent, arranging maintenance, managing tenancies. Pure rent-roll work is not a designated service.
• A private owner selling their own home — you are not providing a service to another person as a business.

The grey zone is the mixed agency. A firm that runs a rent roll and also sells property is caught for its sales arm and must scope its AML/CTF program to that work — even though the property-management side stays outside the regime. Investors and landlords are not reporting entities, but they will feel the reform from the other side of the desk: when they buy or sell, their agent will now ask them to verify their identity and the source of their funds before the deal proceeds.

The five obligations

A real estate business that provides a designated service becomes a reporting entity and takes on five core obligations.

1. Enrol with AUSTRAC. Register the business on the AUSTRAC Reporting Entities Roll within the enrolment window. Enrolment is the gate; you cannot lawfully provide a designated service after commencement without it.
2. Maintain a written AML/CTF program. A documented program built on a money-laundering and terrorism-financing risk assessment of your business — your customer types, the transactions you handle, the geographies and delivery channels involved — with the policies and controls that manage that risk, plus governance, training, and an independent review.
3. Conduct customer due diligence (CDD). Identify and verify your customers, and the beneficial owners behind corporate or trust buyers, before you provide the service, and keep monitoring the relationship. Higher-risk dealings — overseas parties, complex structures, unusual funding — call for enhanced checks.
4. Report suspicious matters and threshold transactions. Lodge a suspicious matter report with AUSTRAC when you form a reasonable suspicion that a transaction may be connected to money laundering, terrorism financing, or another serious crime, and lodge a threshold transaction report for any cash transaction of AUD $10,000 or more.
5. Keep records. Retain the evidence behind all of the above — CDD documents, the program, risk assessments, training records, and report copies — in a form you can retrieve and produce on request. The seven-year retention clock runs not from when you created the record, but from when it stops being relevant to demonstrating compliance — typically when the customer relationship ends or the transaction completes.

The first four obligations are the work of standing up a compliance function. The fifth one never ends — and it is the one that quietly determines whether the other four survive contact with an AUSTRAC audit.

The new document class you’ll keep for seven years

Tranche 2 manufactures paperwork. Every transaction now generates a verification file that did not exist before, and that file has to be findable years later, against the right deal and the right customer. The new record class includes:

• Customer due diligence evidence — identity documents for buyers, sellers, and beneficial owners, and the verification you performed on them.
• Source-of-funds and source-of-wealth records where the risk level called for them.
• The AML/CTF program itself and each version of the money-laundering risk assessment behind it.
• Risk ratings and decisions recorded against individual customers and transactions.
• Training records showing staff completed AML training, and the independent review of the program.
• Copies of suspicious matter and threshold transaction reports lodged with AUSTRAC, and the working that supported them.

Seven years is a long retention window in a business with staff turnover, multiple offices, and a deal book that turns over constantly. The failure mode is not collecting the documents — most agencies will collect them. It is being unable to put your hands on the right customer’s verification file two years later when AUSTRAC asks, or discovering the records are scattered across email, a shared drive, and someone’s desktop, with no way to prove what was held when.

How Proppi helps you stay audit-ready

AML compliance lives or dies on records, and records are exactly what Proppi was built to read, organise, and retrieve. Proppi is a property document and compliance workspace: you put documents in, it classifies and files them against the right property, deal, and party, and it answers questions about them with a citation back to the source page. For a real estate business carrying a new seven-year AML record obligation, that helps in specific ways:

• Classify and file the verification file — identity documents, beneficial-ownership records, and source-of-funds evidence land against the right customer and transaction instead of in a shared inbox.
• Surface the seven-year retention clock and review dates — program reviews, periodic CDD refreshes, and record-retention deadlines are flagged for you to action, the same way Proppi already tracks tenancy and compliance dates.
• Answer an auditor with the source document — when AUSTRAC asks for a customer’s due diligence file, you retrieve it by name and get the underlying page, cited, rather than searching three systems.
• Search across the whole book — find every transaction missing a verification record, or every file touching a particular party, with one query across the deal history.

To be clear about the boundary: Proppi is the record and evidence layer that sits beside your AML/CTF program — it does not perform identity verification or KYC checks, and it does not lodge suspicious matter or threshold transaction reports with AUSTRAC. Those jobs belong to your verification provider and your reporting workflow. What Proppi does is make sure the documents those processes produce are classified, retained, and instantly retrievable for seven years — so that when the regulator examines your business, “show me the records” is a search, not a scramble. See Proppi for property managers, the Australia overview, and features for how the document layer fits alongside the systems you already run.

For the wider compliance picture, see why property management software leaves compliance gaps and how the ATO data-matches Australian landlord records — both turn on the same principle: the obligation is only as strong as the records that prove you met it.

Frequently asked questions

When does AML/CTF Tranche 2 start for real estate in Australia? The Tranche 2 obligations for real estate commence on 1 July 2026. AUSTRAC enrolment opened on 31 March 2026, and reporting entities must enrol by 29 July 2026, or before they first provide a designated service if that falls later.

Who has to enrol with AUSTRAC under Tranche 2? Real estate businesses that broker the sale, purchase, or transfer of real estate must enrol — selling agents, buyers’ agents, and property developers selling directly. The trigger is providing a designated service, not holding a real estate licence in the abstract.

Are property managers and landlords covered by Tranche 2? Generally no. Routine residential property management and leasing is not a designated service. But an agency that also sells property is caught for its sales work, and a private owner selling their own home is not providing a business service.

How long must AML records be kept? Records that support AML/CTF compliance — customer due diligence evidence, the AML/CTF program, risk assessments, and copies of reports lodged with AUSTRAC — must be kept for seven years. The clock starts not when the record is created but when it stops being relevant to demonstrating compliance, generally when the customer relationship ends or the transaction completes.

What are the main Tranche 2 obligations for a real estate agency? Enrol with AUSTRAC, maintain a written AML/CTF program with a money-laundering risk assessment, conduct customer due diligence on the parties to a transaction, report suspicious matters and threshold transactions, and keep the supporting records for seven years.

Last reviewed: June 2026. The AML/CTF reforms, AUSTRAC guidance, enrolment dates, and designated-service definitions are subject to legislative and administrative change, and some detail remains in transitional rules yet to be finalised. The dates and obligations above reflect publicly available AUSTRAC and Australian Government guidance current at the date of publication — confirm the current position with AUSTRAC before acting. This article is general information, not legal or compliance advice — a qualified AML/CTF or legal adviser should be consulted before acting on the contents. Proppi is a document and record-keeping workspace, not an identity-verification, customer due diligence, or reporting provider.