What is Tranche 2 and why does it affect real estate agents?

What is Tranche 2?

“Tranche 2” refers to the second phase of Australia’s anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Tranche 1, introduced in 2006, covered banks and financial services. Tranche 2 extends those laws to a wider range of sectors — including real estate agents.

The legal basis is the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which passed in November 2024 after nearly two decades of delays.

Why real estate?

Real estate is one of the world’s most common channels for money laundering. Criminals use property purchases to move large amounts of cash into legitimate assets, often using complex ownership structures, overseas funds, or third-party intermediaries to hide the source.

Australia has been on FATF’s (the international money laundering watchdog’s) radar for years over the lack of AML/CTF coverage in real estate. The reforms address this directly.

Does this apply to my agency?

The obligations apply if you broker the purchase, sale, or transfer of real estate for other people as part of a business. This includes:

Standard buyer’s agent and seller’s agent work
Auctioneers
Property developers who sell directly (without an independent agent)

Property management is not affected. If your agency only manages rentals and doesn’t handle sales, you’re not a designated entity under Tranche 2.

If you do both sales and property management: The obligations apply to the sales portion of your business. You are a designated entity — the exemption only covers agencies that exclusively manage rentals with no sales activity at all.

Key dates

Date	What happens
31 March 2026	AUSTRAC enrolment opens
1 July 2026	AML/CTF obligations commence
29 July 2026	Deadline to notify AUSTRAC of your Compliance Officer
1 Jan – 31 Mar 2027	Window to lodge your first Annual Compliance Report

AUSTRAC has stated the deadline will not be extended. The July 2026 FATF mutual evaluation of Australia’s AML/CTF framework makes any softening very unlikely.

What do you actually need to do?

In summary, before and after 1 July 2026 you’ll need to:

Enrol with AUSTRAC via AUSTRAC Connect
Build an AML/CTF Program — a documented set of policies and procedures for managing money laundering risk
Appoint a Compliance Officer at senior management level
Verify your clients’ identities (Customer Due Diligence) before providing services
Screen clients against the DFAT Consolidated Sanctions List
Report suspicious activity (Suspicious Matter Reports) and large cash transactions (Threshold Transaction Reports)
Keep records for 7 years
Lodge an annual compliance report each year

It sounds like a lot — but most of it is a one-time setup (the program) plus routine steps you do for each new client.

What are the penalties?

Non-compliance carries significant civil penalties under the AML/CTF Act 2006 (s 175). Body corporate penalties can reach up to A$36.4 million per contravention (100,000 penalty units at A$364 each), and an individual can face up to A$7.28 million per contravention (20,000 penalty units). The penalty unit has been A$364 since 1 July 2026, indexed under s 4AA of the Crimes Act 1914; the next indexation is due 1 July 2029. These penalties are per-contravention — multiple failures stack up.

AUSTRAC’s approach is “supportive but firm.” It will work with agencies making a genuine effort, but will act against those who do nothing.

What AML Simple does (and doesn’t do)

AML Simple is a workflow tool. It helps you organise your compliance program, manage CDD records, run sanctions screening, and prepare reports. It doesn’t give legal or compliance advice.

Have a specific compliance question? Book a 1:1 with an AML expert for personalised guidance from a qualified compliance professional.