Members of Real Estate Excellence - as per the extensive information provided in the February, June and July 2025 Real Estate Excellence Member Updates email service. We shall continue to update and remind you as part our services.
In preparation for the changes to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 which are due to commence on 1 July 2026, "tranche 2" entities including lawyers, accountants and real estate agents will need to make some significant changes to their business processes to ensure they comply with the new requirements.
Lawyers, accountants and real estate professionals will become "reporting entities" where they provide "designated services" to their clients which will include many of the fundamental services that are commonly provided by these entities.
Useful link Education and guidance | AUSTRAC
10th July 2025 - Preparing for 1 July 2026
As with many new substantive regulatory requirements it is better to prepare early. Tranche 2 entities should start preparing for 1 July 2026 as many of the processes and in particular contracts with outsourced providers may take some months to bed in. Some of the key steps, including the following:
- Prepare a timeline to commencement for your business:
Put together a timeline with milestones to July 2026 including how you will manage your obligations (e.g. customer due diligence), document your AML/CTF program and ensure all staff have been trained prior to the commencement date.
- Identify designated services:
Identify which services provided by your business are designated services. This will likely be a significant proportion of services typically provided by lawyers, accountants and real estate agents.
- Conduct your ML/TF risk assessment based on:
- The types of services provided to clients/customers,
- The types of customers,
- Service delivery channels,
- Geographical areas of operation and customer domicile.
- Prepare your AML/CTF policies:
After identifying relevant risks, reporting entities should prepare relevant AML/CTF policies, tailored to the findings of the ML/TF risk assessment.
- Review your customer due diligence (CDD) processes:
Reporting entities must have adequate initial, ongoing, simplified and enhanced due diligence procedures. Entities with a high volume of clients may look to a third party to assist with CDD processes.
Tranche 2 entities should ensure they understand their CDD obligations ahead of 1 July 2026, to avoid any possible interruptions to the ordinary course of business.
- Conduct an independent evaluation:
Reporting entities must arrange for an independent evaluation of their AML/CTF program at least every three years. K&L Gates is well placed to assist tranche 2 entities with independent reviews both upfront and on an ongoing basis.
- Enrol with AUSTRAC and ongoing reporting:
Most new reporting entities will have until 29 July 2026 to enrol with AUSTRAC. Once registered, entities will need to put in place processes for annual and ongoing reporting.
After the finalisation of the draft AML/CTF Rules, sector specific guidance for tranche 2 entities is expected from AUSTRAC later in 2025. Tranche 2 entities should be proactive in preparing for the changes and in particular, commence preparing the ML/TF risk assessment and AML/CTF policies as soon as practicable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Sourced from Preparing For Australia's Anti-Money Laundering And Counter-Terrorism Financing ACT 2006: What Tranche 2 Entities Need To Know - Money Laundering - Australia
From 1 July 2026, anti-money laundering and counter-terrorism financing (AML/CTF) obligations will apply to certain services typically provided by the following businesses, known as tranche 2 entities:
- real estate professionals – such as real estate agents, buyers’ agents and property developers
- dealers in precious stones, metals and products
- lawyers
- conveyancers
- accountants
- trust and company service providers.
Additional virtual asset-related services will also come under AML/CTF regulation from 31 March 2026.
Find out if these changes will affect you on this page. Refer to New industries and services to be regulated | AUSTRAC
Link - Summary of AML/CTF obligations for tranche 2 entities | AUSTRAC
11th June 2025 - Have your say now before the consultation closes.
7th February 2025 - As emailed to Members of Real Estate Excellence as part of the February 2025 Member Update service.
We shall continue to update Members on these future laws which will impact our Industry.
A sourced article below.
As anticipated, the Anti-Money Laundering and Counter-Terrorism Financing (AMT/CTF) Bill was passed by both houses on the 29 November 2024, and is set to capture the Real Estate sector for compliance with the legislation by July 2026.
Businesses captured will include real estate agents, conveyancers, vendor- and buyer-advocates, and direct property developers as well as many others. What these professions might not be aware of though is the amount of work that lays ahead of them as they prepare to meet the regulations of the newly passed Bill.
Why include Real Estate Agents in the Anti-Money Laundering and Counter-Terrorism Financing regime?
Criminals often buy high-value goods, such as Real Estate, as a way of laundering or concealing illicit funds. Australia is now being seen as an easy target for the investment of foreign proceeds of crime in Real Estate. Compared to other methods, money laundering through Real Estate can be relatively simple and requires little planning or expertise. Real Estate can also be used to conduct illegal activities such as the growing or producing of illicit drugs.
The AML/CTF reforms introduce a list of “designated services” performed by Real Estate Agents and Conveyancers, being services that have been identified as posing a risk for money laundering and terrorism financing.
What are the “designated services” relating to Real Estate?
The “designated services” that relate to Real Estate transactions, applying to both Real Estate Agents and conveyancers, will capture:
- brokering the sale or transfer of real estate on behalf of a buyer, seller, transferee or transferor in the course of carrying on a business; and
- selling or transferring real estate in the course of carrying on a business selling real estate, where the sale or transfer is not brokered by an independent real estate agent.
Where legal advice on compliance can help
The Anti-Money Laundering and Counter-Terrorism Financing regime is complex and has a lot of policies, procedures and training that will need to be introduced. The time to prepare relevant documentation and the costs involved to comply with the regime means there is little time to seek advice and be ready to comply with the legislation by 1 July2026.
Sourced from Spotlight on Real Estate: Anti-Money Laundering and Counter-Terrorism Financing Regime - Lexology - practical know-how