The Plain-English Guide to AUSTRAC Tranche 2
From 1 July 2026, Australian real estate agents, lawyers, accountants, trust and company service providers, and dealers in precious metals and stones must comply with the AML/CTF Act. Here is what that means for your business — in plain English.
What is Tranche 2?
“Tranche 2” is the long-anticipated second stage of Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) regime. It extends the existing AML/CTF Act 2006 to cover certain services provided by real estate professionals, legal practitioners, accountants, trust and company service providers, and dealers in precious metals and stones.
The reforms were enacted by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024, which received Royal Assent on 10 December 2024.(Source: Federal Register of Legislation, “AML/CTF Amendment Act 2024”, retrieved 28 April 2026)
Most existing reporting entities saw changes commence on 31 March 2026. New “tranche 2” entities must comply from 1 July 2026.(Source: AUSTRAC, “About the reforms”, retrieved 28 April 2026)
Who does Tranche 2 cover?
You may be a tranche 2 reporting entity if your business provides any of the following designated services from 1 July 2026:
- Real estate agents and buyer’s agents — brokering the sale, purchase or transfer of real estate.
- Property developers — selling real estate they have developed (including off-the-plan).
- Legal practitioners — when providing certain services such as managing client money, forming companies or trusts, or acting on real estate transactions.
- Accountants and bookkeepers — when providing listed services such as company formation, acting as a director or trustee, or managing client funds.
- Trust and company service providers (TCSPs) — forming companies, acting as nominee shareholders or providing a registered office.
- Dealers in precious metals and stones — buying or selling bullion, gold, silver, platinum, diamonds or gemstones above prescribed thresholds.
Designated real estate services apply whether or not money or other consideration changes hands. Some interests are excluded (for example, dwellings not attached to land such as caravan parks and certain retirement village arrangements).(Source: AUSTRAC, “Real estate services (Reform)”, retrieved 28 April 2026)
Key dates
- 10 December 2024Royal AssentThe AML/CTF Amendment Act 2024 became law.
- 31 March 2026Changes commence for existing reporting entitiesAML/CTF program, business group and customer due diligence reforms apply to entities already regulated.
- 31 March 2026Enrolment opens for tranche 2 entitiesAUSTRAC Online accepts early enrolment from new reporting entities so they can be registered before commencement.
- 1 July 2026Tranche 2 obligations commenceReal estate, legal, accounting, TCSP and precious-metal businesses must have an AML/CTF program in place before providing a designated service.
- 29 July 2026Final enrolment deadlineYou must submit your enrolment with AUSTRAC no later than 28 days after first providing a designated service.
(Source: AUSTRAC, “AML/CTF Reform” and “Summary of obligations (Reform)”, retrieved 28 April 2026)
Your five core obligations
Every tranche 2 reporting entity must meet these five obligations once Tranche 2 commences:
- Obligation 01Enrol with AUSTRAC
Register your business through AUSTRAC Online within 28 days of first providing a designated service. Tranche 2 entities can enrol from 31 March 2026 and must enrol by 29 July 2026 at the latest.
- Obligation 02Have an AML/CTF program
Adopt a written program before you start providing services. It must include a money-laundering and terrorism-financing risk assessment, controls to manage that risk, governance arrangements, staff training, and a named AML/CTF Compliance Officer.
- Obligation 03Customer due diligence (CDD)
Identify and verify your customers (and beneficial owners), understand the nature and purpose of the relationship, and apply enhanced checks for higher-risk situations such as politically exposed persons (PEPs) or sanctioned parties.
- Obligation 04Ongoing monitoring & reporting
Monitor transactions and behaviour during the relationship. Submit a Suspicious Matter Report (SMR) when you form a suspicion, a Threshold Transaction Report (TTR) for physical cash of A$10,000 or more, and International Funds Transfer Instructions (IFTIs) where applicable.
- Obligation 05Record-keeping (7 years)
Keep accurate records of customer identification, your risk assessment, transactions and AML/CTF program decisions for at least 7 years. Records must be retrievable on AUSTRAC’s request.
(Source: AUSTRAC, “Summary of AML/CTF obligations for tranche 2 entities”, retrieved 28 April 2026)
What happens if you don’t comply?
AUSTRAC has a graduated set of enforcement tools. Outcomes can range from feedback letters and remedial directions through to infringement notices, enforceable undertakings, and civil penalty orders sought through the Federal Court of Australia.
For the most serious breaches, the maximum civil penalty is up to 100,000 penalty units per contravention for a body corporate, and up to 20,000 penalty units for an individual. The dollar value of a penalty unit is set under the Crimes Act 1914 and changes from time to time.(Source: AUSTRAC, “Consequences of not complying”, retrieved 28 April 2026)
Reputational damage, loss of professional licences and director liability are equally serious risks. AUSTRAC publishes its enforcement actions, so non-compliance becomes public.
60-second readiness checklist
Tick each item you have in place. If you cannot tick all eight, you have work to do before 1 July 2026.
Frequently asked questions
Does Tranche 2 apply to property managers?
The designated services for real estate cover the sale, purchase and transfer of real estate. Standard residential property management of an existing rental tenancy is not listed as a designated service. However, a property manager who also brokers sales or transfers will be captured for those activities.
What about off-the-plan and developer sales?
Yes. Selling real estate you have developed — including off-the-plan apartment or house-and-land sales — is a designated service from 1 July 2026. Developers must enrol with AUSTRAC and have an AML/CTF program in place before contracts are exchanged.
Do I need to enrol if I’m a sole trader?
Yes. Tranche 2 obligations apply regardless of business structure. Sole traders, partnerships and companies must all enrol with AUSTRAC and meet the same core obligations, although AUSTRAC’s sector starter kits are designed to scale down for smaller businesses.
Can I rely on a conveyancer or solicitor to do the customer checks?
The reforms allow limited reliance on another reporting entity for customer due diligence in defined circumstances, but you remain legally responsible for your obligations. You should document any reliance arrangement and confirm the other party is itself a regulated entity.
When do I need to lodge a Suspicious Matter Report (SMR)?
You must lodge an SMR with AUSTRAC if you form a suspicion on reasonable grounds about a customer or transaction — for example, suspected money laundering, terrorism financing or other serious crime. Strict statutory timeframes apply, and you must not “tip off” the customer that a report has been made.
How long do I have to keep client records?
At least 7 years after the relevant event (for example, after the customer relationship ends or the transaction is completed). Records must be readable and retrievable for AUSTRAC if requested.
What does enrolment with AUSTRAC actually involve?
Enrolment is a free online registration through AUSTRAC Online. You provide your business details, the designated services you provide, and your AML/CTF Compliance Officer’s contact details. Enrolment must be completed within 28 days of first providing a designated service.
Sources & further reading
- AUSTRAC — AML/CTF Reform overviewRetrieved 28 April 2026
- AUSTRAC — Summary of AML/CTF obligations for tranche 2 entitiesRetrieved 28 April 2026
- AUSTRAC — Real estate services (Reform)Retrieved 28 April 2026
- AUSTRAC — Consequences of not complyingRetrieved 28 April 2026
- Federal Register of Legislation — Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024Retrieved 28 April 2026
- Attorney-General’s Department — AML/CTF Amendment ActRetrieved 28 April 2026
- AUSTRAC — Real estate program starter kitRetrieved 28 April 2026
Disclaimer: This guide is general information only and is not legal, financial or compliance advice. AMLHive is not affiliated with AUSTRAC or the Australian Government. You should obtain independent professional advice for your specific circumstances. Always check the current AUSTRAC guidance and the AML/CTF Act and Rules before relying on the information above.