For real estate
AML/CTF for real estate agents: buyer and seller verification, risk and reporting
Real estate is one of the highest-risk channels for money laundering in Australia, and Tranche 2 brings agencies into the regime for the first time. From 1 July 2026, an agency that brokers the sale or purchase of property provides designated services — and must run customer due diligence on the people behind every deal.
What is captured in a real estate agency?
Property management and leasing are not, on their own, designated services. The capture point is the sale or purchase transaction. Both sides of the deal need due diligence: your vendor, and where you act for them, your purchaser.
- Acting for a vendor in the sale of real estate
- Acting for a purchaser (including buyer's agency work)
- Property development sales where the developer sells directly
Customer due diligence on a property file
Verification has to move to the front of the sales process — listing or engagement time, not the week before settlement. Agencies that build verification into the listing appointment avoid settlement-day compliance failures.
- Verify the identity of the vendor (and purchaser where you act for them) before the transaction work is provided
- For company or trust sellers, identify and verify the beneficial owners behind the structure
- Screen parties against sanctions lists, PEP registers and adverse media
- Record a risk rating for the relationship — higher scrutiny for offshore parties, complex structures, cash-heavy settlement plans or unusual urgency
- Keep the evidence for seven years
Red flags AUSTRAC expects agents to notice
- A buyer or seller who will not meet, or who deals only through unexplained intermediaries
- Purchase funds arriving from third parties or offshore accounts with no logical connection to the buyer
- Requests to over- or under-state the price in the contract
- Rapid resale or flipping patterns involving the same parties
- Cash-heavy deposit or settlement arrangements
- Company or trust sellers where nobody can explain who really owns the property
Reporting and the criminal offence most agencies have never heard of
Where you suspect a transaction or party is connected to crime, you must report to AUSTRAC — generally within three business days of forming the suspicion. And you must not hint to the client that you have reported or are considering it: tipping off under section 123 of the AML/CTF Act carries up to two years' imprisonment. Train your team to raise concerns to the compliance officer privately and to keep the sales conversation completely normal.
Setting the agency up
- Enrol with AUSTRAC (the 29 July 2026 deadline has passed for existing agencies — enrol now if you have not)
- Appoint and notify your AML/CTF compliance officer
- Write your risk assessment and AML/CTF program — AUSTRAC's starter kit is the baseline
- Build verification into your listing and buyer-engagement workflow
- Train every agent on red flags and the escalation path, and keep the training records
Frequently asked questions
Does a real estate agency have to verify both buyer and seller?
You must perform customer due diligence on the clients you provide designated services to. Acting for a vendor means CDD on the vendor; a buyer's agent performs CDD on the purchaser. In a standard sale where you act only for the vendor, the purchaser is typically verified by their own agent or conveyancer — but your program should define how your agency treats each party.
Is property management caught by Tranche 2?
Routine leasing and property management are not designated services on their own. An agency is captured through sale and purchase work. Most full-service agencies are therefore reporting entities because of their sales business, and their program covers the captured services.
What happens if a buyer refuses identity verification?
You cannot complete the required due diligence, so you should not provide the designated service. Your program should make verification a condition of acting, communicated at engagement time — not at exchange.
How long must real estate AML records be kept?
Seven years. This covers identity verification evidence, screening outcomes, risk decisions, and any reports made to AUSTRAC, and the records must be retrievable if AUSTRAC asks.
Put it into practice
Cassandra AML turns these obligations into a working system: designated-service decisions, customer due diligence, screening, monitoring and reporting records — hosted in Sydney, free to start.
This guide is general information for Australian professionals. It is not legal advice and does not replace the AML/CTF Act, the AML/CTF Rules or AUSTRAC guidance. Confirm your specific obligations with AUSTRAC or a qualified legal adviser.