AML/CTF for Real Estate Agents: The 2026 Guide

Real estate agents in Australia will become regulated entities under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act 2006 from 1 July 2026, when Tranche 2 reforms take effect. If you operate a real estate agency — whether selling residential property, commercial property, or both — you will need to enrol with AUSTRAC, build an AML/CTF programme, and verify the identity of your clients. With just 69 days until the deadline, the time to act is now.

Why Are Real Estate Agents Being Brought into the AML/CTF Regime?

Property is one of the most commonly exploited vehicles for money laundering in Australia. Large transaction values, the involvement of offshore buyers, and complex ownership structures make real estate an attractive channel for criminals seeking to convert illicit funds into legitimate assets. The Financial Action Task Force (FATF) — the global standard-setter on AML/CTF — has long identified real estate as a high-risk sector and has criticised Australia for leaving real estate agents, lawyers, and accountants outside the regulated framework. Tranche 2 of the AML/CTF reforms closes this gap. Under the AML/CTF Amendment Act 2024, real estate agents providing services related to the purchase or sale of real property will be designated reporting entities from 1 July 2026.

What Obligations Will Real Estate Agents Have Under Tranche 2?

Once designated as a reporting entity, your agency will have the following core obligations under the AML/CTF Act 2006:

1. Enrol with AUSTRAC — Register as a reporting entity on the AUSTRAC Online portal before providing designated services.

2. Develop an AML/CTF programme — Create a written, risk-based programme covering customer due diligence, transaction monitoring, and staff training.

3. Conduct customer due diligence (CDD) — Identify and verify clients before providing services, with enhanced due diligence for higher-risk clients.

4. Monitor ongoing client relationships — Review client activity for suspicious patterns throughout the transaction lifecycle.

5. Submit reports to AUSTRAC — Lodge Suspicious Matter Reports (SMRs) when you suspect a client or transaction may be linked to money laundering or other serious crimes, and Threshold Transaction Reports (TTRs) for physical cash transactions of $10,000 or more.

6. Keep records — Retain customer due diligence records and transaction documents for a minimum of seven years.

What Must a Real Estate Agency's AML/CTF Programme Include?

Under the AML/CTF Act 2006, your programme must contain two distinct parts:

Part A — Risk management: A documented assessment of the money laundering and terrorism financing (ML/TF) risks your business faces, and the controls in place to manage those risks. This must reflect your client base, the geographic markets you operate in, your transaction types, and the delivery channels through which you provide services.

Part B — Customer identification and verification: The procedures your agency will follow to identify individuals and the beneficial owners of entities, verify that identity against reliable and independent sources, and apply enhanced due diligence for higher-risk clients.

Your programme must also include an employee due diligence policy, an ongoing AML/CTF training programme for staff, and a process for regular programme review. AUSTRAC recommends reviewing your programme at least annually or whenever there is a significant change to your business model or client base.

AMLify's compliance features are designed to help real estate agencies build, document, and maintain all of these programme components from a single platform.

What Are the Red Flags for Money Laundering in Property Transactions?

Knowing what to look for is one of the most practical skills you can develop before 1 July 2026. Common red flags in real estate transactions include:

• Unexplained cash or cryptocurrency payments — Any buyer seeking to purchase using cash, cryptocurrency, or unusual payment methods without a clear, legitimate explanation

• Third-party payments — Funds arriving from someone other than the named buyer, with no clear relationship or documented explanation

• Purchases without property inspection — A buyer acquiring a high-value property sight-unseen, particularly from offshore

• Complex or opaque ownership structures — The use of multiple companies, trusts, or nominee arrangements that obscure who ultimately controls the funds

• Price discrepancies — Offers significantly above or below market value without a credible commercial rationale

• Unusual urgency — Pressure to settle quickly or bypass standard due diligence processes

• Politically Exposed Persons (PEPs) — Clients who are, or are closely connected to, current or former senior government officials, domestically or internationally

The presence of one or more of these indicators should prompt closer scrutiny and may trigger an obligation to submit a Suspicious Matter Report to AUSTRAC.

How Do Real Estate Agents Identify and Verify a Client's Identity?

Customer due diligence starts with knowing your client. For individual buyers or sellers, you must collect their full name, date of birth, and residential address, then verify this information against a reliable, independent source — such as a driver's licence, passport, or an accredited digital identity verification service.

For companies, trusts, or other entities, you must first identify the entity itself, then look through to the beneficial owner — the individual or individuals who ultimately own or control the entity. Under AUSTRAC's guidance, this generally means anyone holding more than 25% ownership or exercising effective control. Beneficial ownership verification is one of the more complex aspects of Tranche 2 compliance and a frequent area where agencies need additional support.

For a structured workflow to manage CDD for both individuals and entities, see how AMLify supports real estate agents.

How Can Real Estate Agents Get Ready in the Next 69 Days?

The 1 July 2026 deadline is approximately 10 weeks away. Here is a practical action plan to get your agency compliant in time:

1. Audit your current position — Review any existing policies and assess your team's awareness of the upcoming changes.

2. Enrol with AUSTRAC — Complete your registration on AUSTRAC Online if you have not already done so.

3. Conduct a risk assessment — Map your client base, transaction types, and service channels to establish your ML/TF risk profile.

4. Build your AML/CTF programme — Draft your Part A risk management documentation and Part B customer identification procedures.

5. Train your agents — Ensure every team member understands their obligations, particularly around recognising red flags and submitting SMRs.

6. Implement compliance technology — Manual processes are time-consuming and error-prone. Purpose-built platforms automate identity verification, risk scoring, and regulatory reporting.

Key Takeaways

• Real estate agents become regulated reporting entities under the AML/CTF Act 2006 from 1 July 2026 — just 69 days away

• Core obligations include enrolling with AUSTRAC, developing a written AML/CTF programme, conducting customer due diligence, and submitting reports to AUSTRAC

• Your AML/CTF programme must address risk management (Part A) and customer identification and verification procedures (Part B)

• Common money laundering red flags in property transactions include third-party payments, offshore purchasers, complex ownership structures, and unexplained cash

• With under 10 weeks remaining, agencies that have not yet started compliance preparations should prioritise AUSTRAC enrolment and a risk assessment immediately

Frequently Asked Questions

Q: Do real estate agents need to comply if they only manage rental properties?

The Tranche 2 obligations under the AML/CTF Act 2006 apply to real estate agents who provide services related to the purchase or sale of real property. Pure property management services — such as managing residential tenancies — are not currently designated services under the reforms. However, if your agency provides both sales and property management, you will still be a reporting entity for your sales activities. It is advisable to seek independent legal advice on the precise scope of your obligations.

Q: What is a Suspicious Matter Report and when must a real estate agent lodge one?

A Suspicious Matter Report (SMR) is a report lodged with AUSTRAC when you have reasonable grounds to suspect that a transaction or client may be related to money laundering, terrorism financing, tax evasion, or another serious offence. As a reporting entity, you are legally required to submit an SMR within three business days of forming that suspicion — or within 24 hours if the matter relates to terrorism financing. It is a criminal offence to tip off a client that an SMR has been, or may be, submitted.

Q: How long must real estate agents retain AML/CTF records?

Under the AML/CTF Act 2006, reporting entities must retain records relating to customer identification, verification, and transactions for a minimum of seven years from the date the record was made or the relevant transaction occurred. These records must be stored in a way that allows them to be retrieved and provided to AUSTRAC within a reasonable time if requested.

Q: Can a real estate principal outsource their AML/CTF compliance obligations?

Some compliance functions — such as identity verification and risk scoring — can be supported by third-party technology providers. However, the legal responsibility for compliance remains with the reporting entity at all times. A real estate principal cannot transfer their regulatory obligations to a vendor; they remain accountable to AUSTRAC for the adequacy of their programme, regardless of which tools or service providers they use.

Q: What if my agency misses the 1 July 2026 deadline?

Operating as a reporting entity without enrolling with AUSTRAC or without an adequate AML/CTF programme is a serious breach of the AML/CTF Act 2006. AUSTRAC has broad enforcement powers, including the ability to issue infringement notices, accept enforceable undertakings, apply for civil penalty orders, or refer matters for criminal prosecution. Civil penalties for significant non-compliance can reach into the tens of millions of dollars. Starting your compliance preparations now — even with a basic risk assessment and AUSTRAC enrolment — is far preferable to facing enforcement action after the deadline.

This is general information only and not a substitute for legal advice.