What Is AUSTRAC Tranche 2? A Plain-English Guide for Real Estate Agents

If you run a real estate agency in Australia, you've probably heard the term “Tranche 2” floating around. Maybe your industry body mentioned it. Maybe a competitor brought it up. Maybe you saw it in a LinkedIn post and kept scrolling.

Here's the short version: from 1 July 2026, your agency must comply with Australia's anti-money laundering laws. This isn't optional. The penalties for non-compliance are up to $33 million.

Let's break it down.

What is Tranche 2?

Australia's anti-money laundering and counter-terrorism financing (AML/CTF) laws have been around since 2006. But they only applied to banks, financial institutions, casinos, and remittance providers — the so-called “Tranche 1” entities.

Tranche 2 extends these laws to “gatekeeper professions” — industries that criminals commonly use to launder money. Real estate is one of the biggest.

The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024 was passed by Parliament in late 2024. It brings real estate agents, buyer's agents, property developers, accountants, lawyers, and other professionals under AUSTRAC regulation.

Who is captured?

If your agency provides any of these “designated services,” you're captured:

• Seller's agents — brokering the sale of real estate on behalf of a vendor
• Buyer's agents — brokering the purchase of real estate on behalf of a buyer
• Auctioneers — conducting auctions as part of the sale process
• Property developers — selling or transferring real estate directly (without a broker)

Who is NOT captured?

• Property management only — if you only manage rentals and don't broker sales, you're not captured
• General property advice — referrals, valuations, and advisory services are not designated services
• Court-ordered transactions — excluded from the definition

Important: If your agency does property management AND sales, you're captured for the sales activity. The property management side doesn't exempt you.

What do you need to do?

Captured agencies must:

1. Enrol with AUSTRAC — register your business on the Reporting Entity Roll via AUSTRAC Online. Enrolment opened 31 March 2026, with a final deadline of 29 July 2026.
2. Conduct an ML/TF/PF Risk Assessment — identify the money laundering, terrorism financing, and proliferation financing risks specific to your agency.
3. Develop an AML/CTF Program — a written set of policies and procedures (Part A covering CDD and Part B covering employee due diligence).
4. Implement Customer Due Diligence (CDD) — verify the identity of both buyers AND sellers for every transaction. Yes, both.
5. Appoint a Compliance Officer — a senior person responsible for your AML/CTF program. Must be appointed within 28 days of providing designated services.
6. Screen against sanctions lists — check all customers against the DFAT Consolidated List, UN sanctions lists, and targeted financial sanctions.
7. Train your staff — all employees must understand their AML/CTF obligations, how to identify red flags, and how to report suspicious matters.
8. Report suspicious matters — file Suspicious Matter Reports (SMRs) with AUSTRAC within 24 hours for terrorism-related matters, or 3 business days for all others.
9. Keep records — retain all CDD records, transaction records, and compliance documents for a minimum of 7 years.

Key dates

What are the penalties?

AUSTRAC has significant enforcement powers. Penalties for non-compliance include:

• Civil penalties — up to $33 million for body corporates, $6.6 million for individuals
• Criminal penalties — for serious offences including tipping off (telling someone you've filed or will file a suspicious matter report)
• Remedial directions — formal orders to fix compliance gaps
• Enforceable undertakings — binding commitments to rectify issues
• Public enforcement actions — published on AUSTRAC's website for anyone to see

Why real estate?

Real estate is one of the most common vehicles for money laundering globally. The Financial Action Task Force (FATF) has repeatedly flagged Australia for not extending AML/CTF regulation to real estate — something most comparable countries did years ago.

Property transactions involve large sums of money, complex ownership structures (trusts, companies, foreign entities), and cash deposits. Without proper due diligence, criminal proceeds can be “cleaned” through property purchases.

AUSTRAC estimates that billions of dollars in illicit funds flow through Australian real estate each year. Tranche 2 is designed to close this gap.

What should you do right now?

If you're an agency principal reading this, here's your action plan:

1. Check if you're captured — take our free 60-second quiz to confirm
2. Don't wait — compliance consultants and law firms will be overwhelmed as the deadline approaches. Agencies that start now will pay less and get more attention
3. Get professional help — the AUSTRAC starter kit is a starting point, but it's generic. You need a program customised to your agency
4. Budget for it — expect to spend $3,500–$15,000 depending on your agency size and who you engage