Navigating the New AML/CTF Reforms: A Guide for Real Estate Business Owners and Property Developers

Australia’s Anti‑Money Laundering and Counter‑Terrorism Financing (AML/CTF) regime is set for a significant overhaul, with reforms taking effect from 1 July 2026. The reforms focus on assessing, identifying and mitigating risk relating to money laundering, terrorism financing and proliferation financing.  These changes extend AML/CTF obligations to a broader range of non-financial sectors, including property developers, now classified under “Tranche 2 entities”.

Who Is Captured?

The reforms apply in two key scenarios relating to the sale of real estate:

1. Brokered transfers – when real estate is sold, purchased, or transferred via agents on behalf of buyers or sellers.

2. Direct sales by developers – when property developers sell or transfer real estate directly, such as house-and-land packages, off-the-plan apartments, or subdivision blocks, without involving independent agents.

If developers conduct or facilitate sales directly - even through in-house staff - they are considered to be providing a “designated service” and must comply with AML/CTF obligations. However, if sales are handled exclusively by third-party agents, the developer may not fall under the reformed regime.

Key Obligations (From 1 July 2026)

Real estate business owners and property developers captured by the reform must comply with a range of obligations:

• Registration with AUSTRAC - Register as a formal “reporting entity” with the Australian Transaction Report and Analysis Centre (AUSTRAC).

• Risk-Based AML/CTF Program - Develop and maintain a tailored program, including:

  • Conducting a business‑specific risk assessment;

  • Implementing mitigation strategies proportionate to identified risks; and

  • Documenting roles of governing body and a dedicated compliance officer.

• Appointment of a Compliance Officer - Designate a fit and proper person to oversee AML/CTF compliance.

• Customer Due Diligence - Perform initial and ongoing checks, including identity verification, beneficial ownership, and enhanced due diligence for high-risk clients (e.g. politically exposed persons).

• Transaction Monitoring & Reporting - Monitor transactions and report suspicious activities or threshold transactions to AUSTRAC.

• Record-Keeping – Maintain accurate records of AML/CTF activities for at least seven years.

Penalties for Non‑compliance 

Failure to enrol within the window (31 March 2026 to 29 July 2026) may result in significant penalties, including up to 100,000 penalty units for a body corporate.

Why it Matters

• The reforms aim to close gaps in regulating high-risk sectors, particularly property, which has historically been used to launder illicit funds.

• For developers and real estate business owners, compliance will add operational costs, but these will be risk-based and proportionate. Smaller operations may face lighter obligations, while larger or more complex developers will need more robust systems.

Recommended Next Steps

1. Assess Your Business Model - Identify whether your sales approach involves real estate sales without independent agents as this would trigger compliance obligations.

2. Seek Legal and Compliance Advice - Given the complexity and potential penalties, professional guidance is essential.

3. Begin Early Preparation - Review AUSTRAC guidance from mid‑2025 and prepare internal processes, staffing, and documentation ahead of the reforms.

4. Plan Enrolment and Compliance Implementation Immediately - Ensure you can enrol by 29 July 2026 and have processes in place for training, due diligence, program development, and record-keeping.

Australia’s AML/CTF Tranche 2 reforms represent a major shift, extending critical anti-financial crime obligations into property development. By taking proactive steps, real estate business owners and property developers can strategically comply and manage risk before obligations take effect on 1 July 2026.

The time to act is now. If you need assistance in assessing your compliance requirements, please contact us.

Eollyn Cortes 0478 727 395

Sagang Chung 0431 435 333