For the first time since Australia’s Anti-Money Laundering and Counter-Terrorism Financing Act was introduced in 2006, real estate agents are being brought inside the regulatory perimeter. The change is known in the industry as “Tranche 2,” and it means that agencies which have never had to think about AML compliance now need a documented program, a compliance officer, and processes for verifying clients before settlement day.
For as long as most property managers have been in the industry, compliance has meant one thing: state-based legislation like the Property and Stock Agents Act in NSW, the Estate Agents Act in Victoria, or the Agents Financial Administration Act in Queensland. Separate the funds, receipt correctly, reconcile monthly, get audited annually. None of that changes. What changes is that a second, federal layer now sits on top of it — and if your agency receives or holds trust money, it applies to you.
If you run a real estate agency, property management business, or provide buyer’s agent services in Australia, this article covers what’s changing, why it matters, and how to get ready without turning your office upside down.
What is Tranche 2, and why now?
Banks, casinos, and remittance providers have operated under AML/CTF obligations since 2006 - that’s “Tranche 1.” Tranche 2 extends the same framework to a group of professions long seen as gatekeepers to the financial system: real estate agents, lawyers, accountants, conveyancers, and trust and company service providers.
Property has been flagged for years as an attractive vehicle for laundering illicit funds, since large sums can move through a single transaction with comparatively little scrutiny. The reform closes that gap. It’s expected to bring tens of thousands of previously unregulated businesses under AUSTRAC’s oversight, with real estate agents among the first cohort in scope.
Key dates
- 31 March 2026 - AUSTRAC enrolment opened for Tranche 2 entities.
- 1 July 2026 - AML/CTF obligations formally commence for real estate agents and other Tranche 2 entities.
- 29 July 2026 - Deadline to complete AUSTRAC enrolment (or within 28 days of first providing a designated service, if that’s later).
If your agency provides designated real estate services - selling, leasing, or facilitating transactions - and you haven’t yet enrolled with AUSTRAC, this should be at the top of your to-do list.
What agencies actually need to do
The obligations aren’t a single form to fill out. They’re an ongoing compliance framework with several moving parts:
1. Enrol with AUSTRAC. This is the starting point and a straightforward online process, but it has a hard deadline attached and civil penalties for missing it.
2. Conduct a risk assessment. Before you can build a compliance program, you need to understand your own exposure - the types of transactions you handle, the client profiles you deal with, the geographies involved, and any third-party relationships that add risk.
3. Write your AML/CTF program. This has two parts: a governance and risk framework (how your business identifies and manages ML/TF risk), and a customer due diligence procedure (how you verify identities, screen for politically exposed persons and sanctions matches, and apply enhanced checks where warranted). AUSTRAC has published starter templates aimed at smaller businesses, which is a sensible starting point for most agencies rather than building a program from a blank page.
4. Appoint a compliance officer. Someone at management level needs to own this - for many agencies, that will be the principal or director.
5. Verify your clients. Know-your-customer checks on buyers, sellers, landlords and tenants before you act for them, including identity verification and screening against sanctions and PEP lists. For property management this runs across the tenancy relationship, not just at its start — many agencies already do a version of this informally, and the gap is usually consistency and documentation rather than a total absence of process.
6. Monitor and report. Rather than a one-off check when a relationship begins, you are expected to keep an eye on transaction patterns and flag anything out of step — unusual payment sources, large cash transactions — with suspicious matter reports lodged with AUSTRAC where warranted.
7. Keep records for seven years. Transaction records, verification documents, and your AML/CTF program materials all need to be retained and readily accessible.
8. Train your staff. Everyone involved in client-facing transactions needs training appropriate to their role.
The cost of getting it wrong
AUSTRAC’s enforcement powers are broad, ranging from written notices and enforceable undertakings through to suspension of registration and, in serious cases, referral for criminal prosecution. Civil penalties can reach into the tens of millions of dollars for a body corporate, and individuals can also be held personally liable. AUSTRAC has indicated it will take an educative, risk-based approach in the early transition period - but that’s a grace period for tone, not an exemption from having your program in place by the commencement date.
Why this sits so close to trust accounting
The overlap with trust accounting isn’t a coincidence. Trust money is, by definition, someone else’s money moving through your systems - which is exactly the kind of flow AML regulation exists to watch.
None of this replaces the trust accounting obligations agencies already have under state-based property legislation, but a well-run trust account already produces much of the audit trail an AML/CTF program depends on: clean records of who paid what, when, and through which channel; reconciled ledgers; and a documented history you can hand to a regulator or auditor without a scramble. If every dollar already ties back to a person and a property, you have most of the raw material the new program needs.
The corollary is the uncomfortable part. Agencies with messy, manual trust processes have considerably more work ahead, because they’re effectively building both systems from a standing start at the same time.
What to do between now and 1 July
A few practical steps make this far less daunting:
- Map your money flows. Know exactly where funds enter your trust account, from whom, and for what purpose. This is the foundation of any due diligence program.
- Audit your current KYC habits. Most agencies do some version of this already for new landlords and tenants. Look for the gaps in consistency and documentation.
- Talk to your auditor early. Your existing trust account auditor is a natural first point of contact - they already understand your business and can help scope what a proportionate program looks like for an agency your size.
- Get your record-keeping trust-account-grade. If your reconciliations, receipting, and ledger notes are already clean and auditable, layering AML documentation on top is a matter of adding fields, not rebuilding from scratch.
The upside of getting ahead of it
Agencies that treat this as a compliance afterthought tend to find it lands as a scramble in June. Agencies that treat trust accounting and AML readiness as one connected system, rather than two separate headaches, generally find the new obligations slot in with far less disruption.
It’s also a reasonable moment to ask whether your current trust accounting setup, whatever platform it runs on, actually gives you the clean, exportable transaction history that both your state regulator and AUSTRAC are going to want to see.
At Trust Account Solutions, we see this as a natural extension of the discipline we already bring to daily receipting, reconciliations, and end-of-month processing. If you’d like help mapping where your agency stands against the July 2026 deadline - or simply want a stronger trust accounting foundation before AML obligations layer on top - we can help you build both at once.
Where to go for more detail
This article is general information, not legal advice. AUSTRAC’s own website has detailed sector-specific guidance and starter program templates for real estate agents, and it’s worth engaging a lawyer or compliance specialist to review your program before 1 July if you haven’t already started.
Trust Account Solutions provides outsourced trust accounting for real estate agencies across Australia. Get in touch if you’d like to talk through how your trust accounting processes fit into your broader compliance picture.