Streamline AML Compliance with Proptech

Tranche 2 Reforms Hit Real Estate

Australia has long lagged behind international peers in regulating non-financial professions for money laundering risks. Real estate, identified globally as a prime channel for laundering illicit funds due to high-value transactions and often opaque ownership structures, remained outside the core AML/CTF regime until now.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, passed in November 2024, expanded the regime to 'Tranche 2' entities. This includes real estate professionals providing designated services such as brokering sales, transfers, or developments. The AUSTRAC-issued AML/CTF Rules 2025, tabled in August 2025, set out the detailed obligations.

Key deadlines loom large. Enrolment opens on 31 March 2026, with full obligations commencing 1 July 2026. Affected parties—estimated in the tens of thousands across agents, developers, and conveyancers—must establish AML/CTF programs, appoint compliance officers, train staff, perform ongoing customer due diligence, monitor transactions, and lodge reports including suspicious matter reports and threshold transaction reports where applicable.

The stakes are concrete. Non-compliance exposes firms to civil penalties scaled to breach severity, potentially reaching millions for serious or systemic failures, alongside reputational harm and operational disruption. AUSTRAC has signalled active monitoring and enforcement from day one. Real estate's cash-heavy and cross-border elements heighten scrutiny.

Less discussed is the tension between compliance costs and market efficiency. Smaller agencies may struggle with setup expenses for systems, training, and external expertise, while larger players adapt more readily. Proptech tools for automated due diligence and verification promise to ease burdens, but integration requires time and investment. Industry commentary notes an initial 12-24 month adjustment period of friction before processes normalise, as seen in other sectors.

These reforms reflect Australia's response to FATF pressure and domestic financial crime concerns, but they arrive amid a property market already navigating economic headwinds.