Why is real estate a target?
Property is one of the most common vehicles for laundering illicit funds worldwide. AUSTRAC and international bodies like the FATF have identified real estate as a key sector where criminals invest proceeds of crime. Common techniques include using nominees or shell companies to purchase property, paying large cash deposits, and under/over-valuing properties.
Australia's Tranche 2 reforms bring the real estate sector under AML/CTF regulation for the first time — aligning Australia with international standards.
Which real estate services are covered?
The designated services for real estate professionals include:
- Buying or selling real property — acting as an agent in the sale or purchase of residential, commercial, or industrial property
- Auctioning real property — conducting property auctions
- Managing real property for sale — preparing properties for sale, managing the sales process
Property management (rental management) is generally NOT a designated service unless it involves selling property. However, if your agency handles both rentals and sales, your sales division is covered.
What you need to do
Step 1: Assess your obligations
If your agency handles property sales in any capacity, you are almost certainly a reporting entity. This includes principal agents, associate agents, and agencies that list and sell property. Use our free compliance check to confirm in 30 seconds.
Step 2: Register with AUSTRAC
All reporting entities must register with AUSTRAC by 29 July 2026. Registration is free and done online.
Step 3: Create your AML/CTF program
Your AML/CTF program must be tailored to the risks your agency faces. For real estate, key risk areas include:
- Clients purchasing through companies, trusts, or nominees
- Large cash deposits or unconventional payment methods
- Off-market or under-value transactions
- Clients from high-risk jurisdictions
- Purchasers showing no interest in the property's condition or investment potential
AUSTRAC provides a real estate Starter Kit to help you develop your program. AML Mate generates a complete program tailored to your agency in 15 minutes.
Step 4: Verify buyer and seller identity
Before acting for a client in a property transaction, you must verify their identity. This applies to both buyers and sellers. For individuals, collect government-issued photo ID. For companies or trusts, identify the beneficial owners.
In practice, this means collecting ID at the start of the agency/listing agreement or before accepting an offer. Many agencies already collect some form of ID — you may just need to formalise and document the process.
Step 5: Monitor and report
You must be vigilant for suspicious activity and file Suspicious Matter Reports (SMRs) with AUSTRAC within 24 hours. Red flags in real estate include:
- Client wants to pay a large cash deposit
- Purchaser uses a third party to make payments without clear reason
- Client is evasive about the source of funds
- Transaction seems inconsistent with the client's profile
- Client requests unusual settlement arrangements
Impact on your agency
What changes day-to-day?
The main operational change is collecting and verifying ID at the start of every agency relationship. You'll also need to train staff to recognise red flags and have a process for filing SMRs. For most agencies, this adds 10–15 minutes per client onboarding.
“My clients will be put off”
Conveyancers and solicitors already collect ID as part of property transactions. Banks verify identity for mortgages. This is simply extending an existing practice to the agency relationship. Frame it as a government requirement — clients are used to it in other contexts.
Costs
Traditional compliance consultants charge $3,000–$8,000 to set up an AML program for a real estate agency. AML Mate starts at $49/month for ongoing compliance management.