Real Estate Agents
Brokering the sale, purchase or transfer of real estate—obligations trigger when transaction is expected to proceed.
Real Estate | Tranche 2
Tranche 2 AML Reforms for Real Estate
Complete guide to Tranche 2 AML/CTF reforms for real estate agents, buyer's agents and property developers. Learn about AUSTRAC designated services, compliance triggers, and obligations.
Key Information
Real Estate: Established Money Laundering Channel Under AUSTRAC
From 1 July 2026, real estate agents, buyer's agents, and property developers will have AML/CTF obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. AUSTRAC identifies real estate as an established money laundering channel in Australia.
Designated Services for Real Estate
Under the Act, these are the designated services that trigger AML/CTF obligations:
- Brokering sale, purchase or transfer of real estate - Acting as an intermediary for property transactions
- Selling real estate without an agent - Where the seller regularly sells real estate as part of their business (e.g., property developers)
Not covered: Property management, rental services, private one-off sales by individuals, and incidental business property sales.
CDD Timing Requirements
When must you conduct customer due diligence?
- Seller's agent: CDD on seller at time of listing or engagement
- Buyer's agent: CDD on buyer at time of engagement
- Both parties: CDD on counterparty when it's reasonably expected the transaction will proceed (typically contract exchange)
- Auctions: CDD on successful bidder immediately after auction
AUSTRAC Risk Indicators for Real Estate
Customer behaviour red flags:
- Avoids face-to-face meetings, obstructive or secretive about ownership
- Ends relationship when asked for CDD information
- Purchases sight-unseen without property inspection
- Prepared to pay over market value with no clear reason
- Requests unusual settlement arrangements
Source of Funds Red Flags
- Large cash deposits or full cash purchases
- Funds that don't match buyer's financial standing or employment
- Won't identify source of wealth or provides inconsistent information
- Third parties providing funds with unclear relationships
- Deposits from multiple different bank accounts
- Unexplained changes in funding arrangements close to settlement
Transaction Red Flags
- Rapid buy-sell transactions (flipping with no clear reason)
- Sale price significantly above or below market value
- Back-to-back transactions between related parties
- Purchaser indifferent to property condition or price negotiations
- Last-minute changes to purchaser names or ownership structure
Complex Structure Red Flags
- Complex corporate structures to obscure beneficial ownership
- Multiple properties purchased through shell companies
- Use of nominees, trusts, or powers of attorney
- Reluctance to disclose who really owns or controls the purchasing entity
- Foreign buyers with no established local presence
Key Dates
- 31 March 2026: AUSTRAC enrolment opens
- 1 July 2026: AML/CTF obligations commence
- 29 July 2026: Enrolment deadline (within 28 days of first designated service)
Who's Covered in Real Estate
Buyer's Agents
Acting on behalf of buyers to find and negotiate property purchases—designated service under the reforms.
Property Developers
Selling house and land packages, apartments off the plan, subdivisions—triggers AML obligations.
Property Managers
Property management services are NOT designated services—only sales and transfers are captured.
Commercial Real Estate
Agents brokering commercial and industrial property sales have the same obligations as residential agents.
Rural & Agricultural
Rural property agents brokering farm and agricultural land sales are captured under the reforms.
Real Estate ML/TF Risk Indicators
High-Risk Purchases
- • Large cash deposits or full cash purchases
- • Third parties providing funds
- • Rapid buy-sell transactions
- • Overseas buyers with no local presence
Structure Red Flags
- • Complex corporate ownership structures
- • Multiple properties via shell companies
- • Nominees or powers of attorney
- • Reluctance to disclose beneficial owners
Transaction Warnings
- • Over or under market value transactions
- • Unusual settlement arrangements
- • Deposits from multiple accounts
- • Purchaser indifferent to property condition
Key Compliance Obligations
AML/CTF Program
Written policies and procedures tailored to your agency. Must address risks specific to your market and client base.
- • ML/TF risk assessment for your agency
- • CDD procedures for buyers and sellers
- • Source of funds verification process
- • Staff training requirements
Customer Due Diligence
Verify identity of buyers and sellers before settlement. Understand the source of purchase funds.
- • Identify all parties to the transaction
- • Identify beneficial owners
- • Verify source of funds (deposits, finance)
- • Screen for PEPs and sanctions
Suspicious Matter Reporting
Report to AUSTRAC when you suspect ML/TF. You cannot tip off clients about reports.
- • 24 hours: terrorism financing suspicions
- • 3 business days: other suspicions
- • Safe harbour for good-faith reports
- • Protected from civil liability
Key Dates
- 31 March 2026: AUSTRAC enrolment opens
- 1 July 2026: AML/CTF obligations commence
- Transaction trigger: When sale expected to proceed
- 7 years: Record retention period
Frequently asked questions
When do AML obligations trigger for real estate agents?
Obligations trigger when it's reasonably expected the transaction will proceed—typically when the buyer's offer is accepted and contracts are signed. You must conduct CDD on both buyers and sellers before settlement.
Why is real estate high-risk for money laundering?
AUSTRAC identifies real estate as an established money laundering channel in Australia. Property can be purchased with criminal proceeds, values can be manipulated, and complex ownership structures can obscure beneficial owners.
What CDD is required for property transactions?
Verify identity of all parties (buyers, sellers, and their representatives), identify beneficial owners of companies/trusts purchasing property, understand the source of funds, screen for PEPs and sanctions, and maintain records for 7 years.
Are private sales captured?
No. Private sales of residential property by individuals and incidental sales of real estate by businesses (e.g., a company selling its office premises) are NOT captured as designated services.
What about property managers?
Property management services (rental management, tenant selection, rent collection) are NOT designated services. Only sales, purchases, and transfers of real estate trigger AML obligations.
Do I need to verify source of funds for buyers?
Yes. You must understand and document how buyers intend to fund their purchase. This includes verifying deposits, identifying finance sources, and flagging cash purchases or unusual funding arrangements.
CDD Solutions for Real Estate
ARCaml automates buyer and seller verification so you can focus on selling property while meeting AUSTRAC requirements.