AML/CTF Compliance Software
Built for Real Estate Agents
Australian real estate agents face new anti-money laundering obligations under AUSTRAC Tranche 2. Property transactions are a known ML/TF risk area. ComplyAU assists you in building your AML/CTF program with property-specific CDD, trust account monitoring, and foreign buyer screening.
What Tranche 2 Means for Real Estate Agents
Real estate has long been identified by the Financial Action Task Force (FATF) and AUSTRAC as a high-risk sector for money laundering. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 brings real estate agents into Australia's AML/CTF regime as “reporting entities” for the first time.
Australia is one of the last FATF member countries to extend AML/CTF obligations to real estate. International experience shows that property transactions are routinely used to launder the proceeds of crime. The Transparency International Australia Acres of Money Laundering report estimated that $1 billion in suspicious property transactions occurred in Australia between 2015 and 2020.
Under the AML/CTF Act 2006 (as amended), real estate agents providing designated services will need to enrol with AUSTRAC, implement an AML/CTF program, conduct customer due diligence, monitor trust accounts for suspicious activity, and report suspicious matters.
The commencement date is 1 July 2026. AUSTRAC enrolment opens 31 March 2026. Agencies should be building their compliance frameworks now.
Your Obligations Under the AML/CTF Act
The following obligations apply to real estate agents providing designated services under s6AA of the AML/CTF Act 2006.
Enrol with AUSTRAC (s75C)
All real estate agents providing designated services must enrol with AUSTRAC before commencing those services. Enrolment opens 31 March 2026.
Establish an AML/CTF Program (Part 7A)
You must develop and maintain a written AML/CTF program covering customer identification procedures, ongoing due diligence, and transaction monitoring (Part A), plus employee due diligence (Part B). The program must address the specific ML/TF risks of property transactions.
Customer Due Diligence (CDD) (s28–35)
Before acting for a client in a property transaction, you must verify their identity using reliable and independent documentation or electronic verification. This applies to both buyers and sellers. Enhanced CDD is required for high-risk clients, including those from high-risk jurisdictions and politically exposed persons.
Beneficial Ownership Identification (s28–35 + AML/CTF Rules)
When a property is being purchased or sold through a trust, company, or other legal structure, you must identify and verify the beneficial owners. This is critical in real estate, where complex ownership structures are commonly used to obscure the true owner of property.
Foreign Buyer Identification (s28–35 + FIRB overlay)
Real estate agents must identify foreign buyers and ensure appropriate CDD is conducted. This interacts with existing FIRB (Foreign Investment Review Board) requirements. AML/CTF obligations add a layer of scrutiny to verify the source of funds and the identity of the ultimate beneficial owner.
Suspicious Matter Reporting (SMR) (s41–49)
If you form a suspicion on reasonable grounds that a transaction may relate to money laundering or terrorism financing, you must lodge an SMR with AUSTRAC. Red flags in real estate include: cash payments, significant price discrepancies, use of third parties to obscure ownership, and clients unwilling to provide identification.
Trust Account Compliance (Part 7A + State rules)
Deposit and settlement funds flowing through your trust account are subject to AML/CTF monitoring. You must implement procedures to detect unusual patterns, large cash receipts, and transactions inconsistent with the property being purchased. These overlay existing state trust account regulations.
Record Keeping (Part 10)
All CDD records, transaction records, and AML/CTF program documentation must be retained for a minimum of 7 years. This includes records of identity verification, risk assessments, and any SMRs lodged.
How ComplyAU Assists Real Estate Agencies
ComplyAU provides property-specific compliance tools to help you meet your AML/CTF obligations without disrupting your sales process.
AML Program Generator
AI builds your Part A and Part B AML/CTF program tailored to real estate agency operations. Covers property sale and purchase workflows, rental management, and trust account procedures.
Property Transaction CDD
Guided CDD workflows for buyers and sellers. Beneficial ownership identification for trusts and companies purchasing property. PEP screening and sanctions checks integrated into your listing and sale process.
Foreign Buyer Screening
Automated checks for foreign buyer indicators. Integrates with your CDD workflow to flag transactions requiring enhanced due diligence, FIRB certification checks, and source of funds verification.
Suspicious Matter Reporting
Property-specific red flag indicators with guided SMR forms. Real-time validation against AUSTRAC requirements. Complete audit trail from suspicion identification through to lodgement.
Trust Account Monitoring
AML/CTF monitoring overlaid on your trust account. Flags unusual deposit patterns, large cash receipts, transactions from high-risk jurisdictions, and amounts inconsistent with the property value.
Staff Training Portal
AML/CTF training modules for real estate agents and support staff. Covers property-specific ML/TF typologies, red flag identification, and reporting obligations. Track completions and issue certificates.
Why Real Estate Is a High-Risk Sector
The Financial Action Task Force (FATF) has consistently identified real estate as one of the sectors most vulnerable to money laundering globally. Property is attractive to criminals because it can absorb large amounts of illicit funds, provides stable value storage, and can be transacted through complex ownership structures that obscure beneficial ownership.
Common ML typologies in Australian real estate include: purchasing property through shell companies or trusts to hide the true buyer, using nominees or third-party purchasers, paying deposits or even full purchase prices in cash, deliberate over- or under-valuation of properties, and rapid sequential transactions (“property flipping”) with no genuine commercial rationale.
As a real estate agent, you are a critical gatekeeper. Your AML/CTF program must include procedures to identify these red flags and respond appropriately, including lodging suspicious matter reports with AUSTRAC.
Frequently Asked Questions
Which real estate activities are designated services under Tranche 2?
Under s6AA of the AML/CTF Act 2006 (as amended), designated services for real estate agents include buying or selling real estate on behalf of a client. This captures the core agency function in both residential and commercial property transactions. Property management (rental management) may also be captured depending on the specific activities performed. The AML/CTF Rules provide further detail on the scope of coverage.
Do I need to verify both the buyer and the seller?
Yes. As a reporting entity, you must conduct CDD on the client you are acting for. In practice, a selling agent must verify the vendor, and a buyer’s agent must verify the buyer. If you act for both parties (where permitted), you must verify both. The level of CDD depends on the risk assessment — standard CDD for most transactions, enhanced CDD for high-risk situations.
What are the red flags for money laundering in real estate?
AUSTRAC and FATF have identified several ML/TF typologies specific to real estate, including: purchases significantly above or below market value, reluctance to provide identification, use of cash or cash equivalents for large amounts, frequent buying and selling of properties with no apparent economic purpose, use of complex ownership structures (especially offshore entities), and third-party funding from an unknown source. Your AML/CTF program must include procedures to identify and respond to these indicators.
How do cash payments work under the AML/CTF regime?
Real estate agents should be aware that large cash payments are a significant red flag for money laundering. While the AML/CTF Act does not currently impose a cash transaction reporting threshold on Tranche 2 entities in the same way as it does for financial institutions, any cash payment that causes you to form a suspicion must be reported via an SMR. The government has also flagged a potential cash payment limit for real estate transactions in future reforms.
What about off-the-plan sales and developer clients?
Off-the-plan sales and developer agency agreements are captured if they involve buying or selling real estate on behalf of a client. CDD must be conducted on the developer client and, where applicable, on purchasers. The specific obligations depend on the nature of your agency relationship and the risk profile of the transaction. Bulk sales to overseas buyers, for example, would trigger enhanced CDD requirements.
Does ComplyAU replace the need for professional advice?
No. ComplyAU is a compliance management tool that assists you in meeting your AML/CTF obligations. It does not provide legal or professional advice. For questions about how the legislation applies to your specific agency operations, consult a qualified AML/CTF professional. ComplyAU helps you build, maintain, and evidence your compliance program.
Compliance Solutions for Other Professions
Sources
All information on this page is based on the following primary sources. This page does not constitute legal or professional advice.
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Federal Register of Legislation)
- AML/CTF Rules 2024 (Federal Register of Legislation)
- AUSTRAC \u2014 Tranche 2 Information (austrac.gov.au)
- AUSTRAC \u2014 Enrolment Guidance (austrac.gov.au)
- FATF Recommendations (Financial Action Task Force)
- FATF \u2014 Money Laundering and Terrorist Financing Risks in the Real Estate Sector (fatf-gafi.org)
Get Your Agency Ready for Tranche 2
Join the waitlist for early access to ComplyAU. Property-specific compliance tools built for real estate agents.
Join the WaitlistAUSTRAC enrolment opens 31 March 2026. Tranche 2 commences 1 July 2026.