The Anti-Money Laundering (AML)/Counter-Terrorism Financing (CTF) regime is set to apply to real estate agents and property developers, with obligations commencing from 1 July 2026.
While the reform has been known for some time, many of you are now turning your attention to what will actually need to change in practice. In many cases, existing processes will require review to ensure they meet the requirements of the new regime.
This article sets out the key obligations and practical steps you should be considering.
What is changing
Under Tranche 2, real estate agents and property developers will be treated as “reporting entities” that provide services in relation to property transactions.
This means AML/CTF obligations will apply to a wide range of property dealings, where there is a transfer of ownership or control of real estate.
The focus of the regime is to reduce the risk of money laundering and terrorism financing by requiring you to understand who your customers are, where funds are coming from, and whether transactions appear consistent with known information.
Key obligations
You will need to have an AML/CTF program in place. This is not simply a policy document, but a framework that must be applied in day-to-day operations.
By 1 July 2026, AUSTRAC requires reporting entities, such as real estate agents and property developers, to:
- be enrolled as reporting entities with AUSTRAC
- have an AML/CTF program in place (either the starter program available from December 2025 or a tailored program)
- appoint an AML/CTF Compliance Officer
- train staff on AML/CTF obligations
- identify and report suspicious activity
Practically, this means you will need to:
- verify customer identity before or during transactions
- understand who ultimately owns or controls the purchasing entity (including companies and trusts)
- make enquiries about the source of funds, and in higher-risk cases, the source of wealth
- assess risk levels for different customers and transactions
- monitor transactions for anything unusual or inconsistent
- report suspicious matters to AUSTRAC where required
Many of you will already have parts of these processes in place, but they may not be consistently applied across all transactions or integrated into existing systems.
Risk-based approach
The AML/CTF regime is risk-based, which means not all transactions are treated the same way.
You will need to consider factors such as:
- the type of customer involved
- whether the purchaser is local or overseas-based
- the structure of the transaction (including trusts or companies)
- the size and complexity of the deal
- how funds are being provided
The level of due diligence required will depend on the risk level identified.
This means you will need to make judgement calls and ensure staff understand when additional checks are required.
Ongoing monitoring
You will also be expected to monitor transactions throughout their lifecycle. This includes identifying changes in ownership structures, unusual payment patterns, or situations where new information raises questions about the original risk assessment.
This will be particularly relevant for developers involved in off-the-plan sales or staged payment arrangements, where transactions can run over extended periods.
Reporting suspicious activity
Where there are reasonable grounds to suspect that a transaction may involve criminal activity or terrorism financing, a report must be made to AUSTRAC.
This obligation applies even if the transaction is not completed.
In practice, the challenge for many of you will be recognising what constitutes “suspicious” in a property context. Indicators may include unusual funding arrangements, unexplained third-party involvement, or transactions that do not align with a customer’s apparent financial position.
Clear internal escalation procedures will be important to ensure concerns are appropriately assessed and reported where necessary.
Record keeping
You will also need to keep records relating to customer identification, due diligence, risk assessments, transactions, and any compliance decisions made.
These records must be sufficient to demonstrate compliance if reviewed by AUSTRAC.
From a practical perspective, you should consider whether your current systems allow this information to be stored in a centralised and accessible way.
Real estate agents
For real estate agencies, AML/CTF obligations will need to be built into existing sales processes.
This includes ensuring customer identification and due diligence checks are completed consistently and that staff understand when additional enquiries are required.
One of the key risks for agencies will be inconsistency between agents or offices, particularly where processes are not standardised or supported by system controls.
Training and clear procedures will be important to ensure obligations are met.
Property developers
For developers, AML/CTF obligations will arise across a range of activities, particularly where there are direct sales, off-the-plan arrangements, or structured payment processes.
Developers will also need to consider arrangements involving trusts, companies, or special purpose vehicles, as these can increase the complexity of identifying beneficial ownership and source of funds.
Where projects involve longer transaction timelines, ongoing monitoring will also become more important.
How Coleman Greig can help
Tranche 2 AML/CTF reforms will introduce significant new obligations for real estate agents and property developers. The practical challenge will be implementation within day-to-day business operations and reducing compliance risk once the regime comes into effect.
Coleman Greig can assist you with:
- understanding whether AML/CTF obligations apply to your business
- identifying designated services and regulatory scope
- developing and implementing AML/CTF compliance frameworks
- reviewing systems, processes and internal controls
If you would like to discuss how the regime applies to your business or begin preparing for implementation, please contact Alex Ong, Principal Lawyer – Commercial Services, or Chris Tohme, Principal Lawyer – Property Services.
