Designated Service 1: Brokering
Brokering the sale, purchase or transfer of real property on behalf of another person. This is your core service as a listing or buyer's agent.
Real Estate Professionals
AML Obligations for Real Estate Agents
Comprehensive guide to AML/CTF obligations for real estate agents under AUSTRAC Tranche 2 reforms. Learn when CDD is required, reporting triggers, and compliance timelines from 1 July 2026.
Key Information
Your AUSTRAC Compliance Requirements from 1 July 2026
From 1 July 2026, real estate agents become reporting entities under Australia's AML/CTF Act when providing services that directly advance the transfer of real property interests. This guide explains your specific obligations based on official AUSTRAC guidance.
Why Real Estate Is High-Risk
AUSTRAC's Money Laundering National Risk Assessment 2024 found the real estate sector poses a high money laundering risk in Australia. Real estate is one of the most common property types found by law enforcement in proceeds of crime investigations.
Property is attractive for criminals because it can:
- Be negatively geared and generate income with strong investment returns
- Provide a seemingly legitimate way to store large sums
- Enable funds to be moved internationally
- Create complex ownership structures that obscure beneficial owners
- Be used as 'supply houses' for illegal drug operations
Real estate professionals are often the first contact point for criminals trying to launder money.
Designated Services
According to AUSTRAC, real estate professionals provide these designated services:
- Brokering the sale, purchase or transfer of real property on behalf of another person - this covers listing agents and buyer's agents
- Selling real property on your own behalf without independent agent assistance - this covers property developers selling directly
When CDD Starts (AUSTRAC Timing)
- Seller's agent: CDD starts when the listing agreement is signed
- Buyer's agent: CDD starts when you sign an agreement to find property for the buyer
- Both parties: Both buyer and seller become your customers when a sales contract is signed
- At auction: You can delay CDD if it would significantly disrupt ordinary business, but complete it promptly after
Your Core Obligations
- Enrol with AUSTRAC by 29 July 2026 (enrolment opens 31 March 2026)
- Develop an AML/CTF program with Part A (customer identification) and Part B (risk assessment)
- Conduct Customer Due Diligence on all customers per the timing above
- Report suspicious matters to AUSTRAC within required timeframes
- Keep records for 7 years
- Train your staff on AML/CTF requirements
AUSTRAC Risk Indicators for Real Estate
Watch for these customer behaviour red flags:
- Avoids face-to-face meetings or is obstructive in dealings
- Ends relationship after you ask for more information
- Buys property in name of third party, relative, or minor without legal reason
- Offers to pay higher commissions or fees
- Asks for shortcuts and rapid transactions
- Reluctant to prove identity or provides vague KYC information
- Documents appear forged or altered
Watch for these transaction red flags:
- Uses large amounts of cash with no clear source
- Offers above-market or accepts below-market value
- Directs sale proceeds to unrelated third party
- Back-to-back property transactions with rapidly increasing values
- Paying deposit in cash or requesting refund by different method
- Uses complex corporate structures for residential purchases
Key Requirements
Designated Service 2: Direct Sales
Selling real property on your own behalf without independent agent assistance - applies to property developers selling direct.
Seller's Agent CDD
CDD starts when the listing agreement is signed. Verify seller identity, authority to sell, and beneficial owners of selling entities.
Buyer's Agent CDD
CDD starts when buyer engages you to find property. Both parties become customers when sales contract is signed.
Auction CDD Rules
At auction, you can delay CDD if conducting it would significantly disrupt ordinary course of auction business. Complete after successful bid.
7-Year Records
Retain all CDD records, transaction documentation, and suspicious matter reports for minimum 7 years after relationship ends.
Frequently asked questions
What are the designated services for real estate professionals?
AUSTRAC defines two designated services: (1) Brokering the sale, purchase or transfer of real property on behalf of another person - this covers listing agents and buyer's agents. (2) Selling real property on your own behalf without independent agent assistance - this covers property developers selling directly to buyers.
When exactly must seller's agents complete CDD?
For seller's agents, CDD starts when you sign a listing agreement with the vendor. You must verify the seller's identity, confirm they have authority to sell (especially for estates, trusts, or corporate sellers), and identify beneficial owners of any entities involved.
When must buyer's agents complete CDD?
For buyer's agents, CDD starts when the buyer engages you to find property for them (signing the buyer's agent agreement). Note that both the seller and buyer become your customers when a sales contract is signed - so listing agents need to verify both parties at contract stage.
What are the auction CDD rules?
At auctions, you can delay conducting CDD if it would significantly disrupt the ordinary course of business. However, you must complete CDD as soon as reasonably practicable after the auction concludes and the successful bidder is identified. Pre-registration of bidders with basic identification is recommended.
Do property developers have AML obligations?
Yes. Property developers or land sellers who sell without using an independent real estate agent are providing a designated service and have full AML/CTF obligations. They must enrol with AUSTRAC and conduct CDD on all buyers.
What are the main ML red flags in real estate?
Key AUSTRAC indicators include: customers avoiding face-to-face meetings, reluctance to provide ID, purchasing in third party names without reason, offering above-market prices, using complex legal structures for residential purchases, cash deposits without clear source, directing settlement proceeds to unrelated parties, and back-to-back transactions with rapidly increasing values.
Streamline Your Real Estate Compliance
ARCaml provides purpose-built AML/CTF tools for real estate agencies. Automate buyer and seller verification, track deposit sources, and meet your AUSTRAC obligations from day one.