Australia's Tranche 2 AML reforms: What real estate businesses need to know
Australia has closed a loophole that financial crime investigators have flagged for years. Starting 1 July 2026, real estate agents, buyers' agents, brokers, and property developers who deal directly with purchasers will be classified as AML/CTF reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act. Enrollment with AUSTRAC opens 31 March 2026, with a deadline of 28 April 2026.
For an industry that has largely operated outside Australia's AML framework, this is a fundamental shift, not a minor update.
In this post, we break down what the reforms require, where the real compliance pressure points are, and what real estate businesses need to do to get ready.
What changed and why it matters
In November 2024, Parliament passed the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, extending the AML/CTF regime to a set of high-risk "gatekeeper" professions, including real estate agents and property developers, for the first time. The legislation is often called "Tranche 2" because it brings these sectors into a framework that has applied to banks and financial institutions since 2006.
The scale of this expansion is significant: when provisions commence on 1 July 2026, approximately 70,000 additional businesses will be brought under the AML/CTF Act, bringing the total number of reporting entities to around 90,000.
So why was real estate targeted? Property has long been a preferred vehicle for money laundering globally. Cash purchases, complex ownership structures, offshore buyers, and layered transactions make it easy to introduce illicit funds and disguise their origin. Australia, like the UK and New Zealand before it, is now putting agents and developers on the frontline of financial crime defence.
AUSTRAC has made clear this is not a box-ticking exercise. The regulator expects every real estate business, from boutique independents to national chains, to operate a genuine, risk-based AML/CTF program.
Who is in scope
The reforms apply to real estate businesses that provide designated real estate services. That covers:
- Real estate agents and brokers
- Buyers' agents
- Property developers selling directly to purchasers
- Online or marketplace-style models that go beyond passive advertising, for example, platforms that broker offers, facilitate auctions, hold deposits, or handle contracts
The service-based framing matters. If your platform or business is actively involved in facilitating the transaction, you are likely in scope regardless of what you call yourself.
What the new obligations require
Real estate businesses classified as reporting entities will need to build out a full AML/CTF compliance framework. The core requirements include:
Registration with AUSTRAC before providing designated services, with enrollment opening 31 March 2026 and closing 28 April 2026.
A documented AML/CTF program covering ML/TF risk assessment, internal governance, controls, staff training, and independent review on a regular cycle.
Customer due diligence (CDD), such as identifying and verifying individuals, understanding beneficial ownership, and assessing source of funds or wealth for higher-risk transactions.
Ongoing monitoring, including risk-rating customers, applying enhanced due diligence for higher-risk cases (such as PEPs, complex ownership structures, or foreign buyers), and keeping that picture current across longer relationships.
Suspicious matter reporting (SMRs), including lodging reports with AUSTRAC where red flags cannot be reasonably explained.
Record-keeping, such as maintaining documentation on CDD, risk decisions, transactions, and reporting outcomes for minimum prescribed periods.
AUSTRAC's real estate program starter kit makes the expected standard concrete: initial CDD forms, risk-rating workflows, escalation procedures to an AML/CTF compliance officer, and documented grounds for suspicion before any SMR is filed.
Where the compliance pressure really sits
Reading the regulatory requirements at face value can make AML/CTF feel like a documentation project. In practice, the hardest part is operationalizing it across the transaction lifecycle and doing so without creating unnecessary friction for agents and buyers.
A few areas where the gap between policy and execution tends to be widest:
CDD timing. AUSTRAC's guidance anchors CDD to specific moments in the deal, typically before or shortly after contract exchange, and in any case before settlement. For high-risk deals, verification needs to happen earlier. Getting this right means building CDD triggers into existing workflows, not bolting on checks at the end.
Beneficial ownership. Identifying who ultimately controls or benefits from a purchase, especially through trusts, companies, or offshore structures, requires more than checking a passport. Agents and developers need processes for collecting, verifying, and documenting UBO information in a way that actually holds up to scrutiny.
Source of funds screening. For large transactions, all-cash deals, or purchases involving foreign remitters, agents need to understand where the money is coming from and whether the explanation makes sense given the customer's profile. This is where enhanced due diligence kicks in, and where many agencies currently have no capability at all.
Suspicious matter judgement. An SMR is not just a form - it requires a compliance decision. Agents need clear escalation paths and documented reasoning so that when something looks wrong, there is a consistent process for handling it.
Scale across the industry. Many Australian agencies have little or no AML infrastructure today. Building a compliant program from scratch, including technology, processes, training, and governance, takes months. Firms that treat July 2026 as the start date rather than the deadline are taking a significant risk.
How to prepare
AUSTRAC and industry advisers are clear: start now.
The practical sequence for most real estate businesses looks like this:
- Conduct a money laundering and terrorist financing risk assessment for your business, covering customer types, transaction sizes, geographic exposure, and delivery channels.
- Design your AML/CTF program around that risk assessment, with documented policies, a compliance officer, and a training plan.
- Map CDD and ongoing monitoring into your deal flow, including where and when customer identity is captured, verified, and risk-rated.
- Identify your technology gaps and which manual processes you're relying on today that won't scale or won't satisfy an AUSTRAC review.
- Enroll with AUSTRAC from 31 March 2026 and ensure you are fully operational by 1 July 2026.
For platforms and marketplaces, this also means auditing where your product sits on the spectrum between passive advertising and active facilitation, because that line determines whether you have reporting obligations and what they look like.
How Sardine can help
If you're a real estate business, property platform, or proptech company working through Tranche 2 readiness, Sardine's AML compliance platform is built for exactly this kind of operational challenge.
We help compliance teams automate the repeatable, high-volume work that AML programs generate and keep it auditable from end to end.
Sanctions, PEP, and adverse media screening. Our AI agents automatically screen customers against global watchlists, surface name matches including partial matches and transliterations, and resolve obvious false positives, so your team focuses on genuinely uncertain cases rather than working through a queue of low-risk hits.
KYC and KYB onboarding. We automate identity verification, beneficial ownership research, and business due diligence across registries, filings, and web sources. That means less manual OSINT work and stronger EDD coverage, especially for complex structures like trusts and offshore entities.
Transaction monitoring and triage. Our agents analyze transaction patterns and flag behaviors consistent with property laundering, including unusual fund sources, third-party payers, and rapid resale patterns, and route high-risk cases to your compliance team with structured summaries rather than raw alerts.
SAR narrative generation. When a suspicious matter needs to be filed, our AI agents generate examiner-ready narratives linked to supporting case evidence, reducing the manual burden on compliance officers and improving consistency across your team. Here’s a quick look at how Sardine can help generate a narrative to speed up SAR filings.
Audit-ready documentation at every step. Every screening decision, risk rating, escalation, and SMR filing is logged with a defensible record, so when AUSTRAC reviews your program, you can show exactly how controls were applied.
Real estate businesses starting their AML programs today don't need to build all of this from scratch. The firms that move early, with the right technology behind them, will be in a position to treat July 2026 as a non-event, rather than a deadline they're scrambling to meet.
