What the New AML/CTF “Tranche 2” Laws Mean for Property Buyers and Sellers

You may start hearing more about Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) “Tranche 2” laws in the real estate industry over the coming months.

From 1 July 2026, real estate agencies across Australia will be required to comply with new federal regulations designed to help prevent criminal activity such as money laundering through property transactions. These changes are being introduced and regulated by the Australian Government agency Australian Transaction Reports and Analysis Centre (AUSTRAC).
While this may sound complicated, the goal is quite simple — to strengthen transparency in large financial transactions and help protect the integrity of Australia’s property market.

Why These Changes Are Happening

For many years, banks and financial institutions have had strict obligations to verify customers and monitor transactions for suspicious activity. The Australian Government is now extending those same requirements to several other industries that play a role in large financial transactions, including:

  • Real estate agents
  • Buyer’s agents
  • Property developers
  • Lawyers and conveyancers
  • Accountants

This expansion is known as “Tranche 2” of the AML/CTF reforms, and it means real estate professionals will become regulated entities under the AML/CTF framework.

What This Means for Buyers and Sellers

For most people buying or selling property, the process will remain very similar. However, you may notice that real estate agencies are required to ask a few additional questions or verify certain information earlier in the process. This is simply because the law will require agents to confirm the identity of clients and ensure transactions are legitimate.

You may be asked to provide:

Identification:

Agencies will need to verify who they are dealing with. This could include:

  • Driver licence
  • Passport
  • Proof of address

This step is similar to the identification checks you complete when opening a bank account.

Ownership Information

If a property is being purchased through a company, trust or SMSF, agencies may need to confirm who ultimately owns or controls that entity.

Source of Funds (In Some Situations)

In certain circumstances, agencies may need to ask where the funds for a purchase are coming from, such as:

  • Savings
  • Sale of another property
  • Loan or mortgage finance

These checks help ensure property transactions are not being used to hide or move illicit funds.

What Real Estate Agencies Must Do

Under the new legislation, real estate agencies will need to implement several compliance processes before providing certain services such as brokering the sale or purchase of property.

This includes:

  • Enrolling with AUSTRAC as a regulated business
  • Implementing an AML/CTF compliance program
  • Verifying the identity of buyers and sellers
  • Monitoring transactions and reporting suspicious matters if required
  • Keeping certain records for a number of years.

Importantly, these obligations will apply before a property transaction progresses, not after the contract is signed or settled.

What This Means for Our Clients

As these laws come into effect, you may notice a few extra steps at the beginning of the sales or purchasing process.

From our perspective, it simply means we must ensure we are verifying our clients properly and meeting the legal requirements set by the Australian Government.

While it does introduce additional compliance for agencies, these measures are designed to help maintain a safe, transparent and trusted property market in Australia.

Final Thoughts

The real estate industry is currently preparing for these changes ahead of the 1 July 2026 commencement, and agencies across Australia will be putting systems in place to make the process as smooth as possible for clients. At this stage, the reforms apply to real estate services involved in property sales and transactions. Property management services are not currently included in the Tranche 2 requirements.

If you are planning to buy or sell property and have questions about how these changes may affect the process, I’m always happy to help guide you through it. My goal is to ensure every transaction is handled professionally, transparently, and in line with the legislation that governs our industry.