Money laundering causes an estimated $60.1 billion in harm to the Australian economy annually, prompting the extension of tranche 2 AML/CTF legislation* to real estate professionals and other service providers.
According to AML experts AMLHUB, the vast majority of the nation’s 46,000 real estate professionals remain unaware of their new obligations, creating a concerning lack of preparedness across the sector.
“This will result in a real lack of preparedness among the nation’s over 46,000 real estate professionals with many genuinely unaware of the tranche 2 laws and the AML obligations hitting the real estate sector,” Richard Manthel, Chief Executive Officer of AMLHUB said.
The timeline for compliance is strict, with real estate companies required to enroll with AUSTRAC by March 31, 2026, and fully comply with the Act by July 1, 2026.
Missing these key dates could result in substantial penalties.
Mr Manthel warned that procrastination could be costly for businesses.
“We don’t want to see anyone get hit with avoidable fines which can be from $19,000 a day if real estate businesses don’t meet key date milestones,” he said.
AMLHUB is working alongside the regulator, Australian Transaction Reports and Analysis Centre (AUSTRAC), to raise awareness and provide compliance solutions for the industry.
The company has extensive experience in this area, having managed over 500,000 real estate transactions and vendors.
Drawing parallels with similar regulatory changes in New Zealand, Mr Manthel said there were challenges that occurred when comparable regulations were implemented across the Tasman in 2019.
“When the same level of compliance was introduced to the New Zealand real estate sector in January 2019, we saw a lot of last-minute panic with real estate agencies asking, ‘how are we going to do this, and what do we need to do!’” Mr Manthel said.
AMLHUB currently supports over 10,000 real estate agents in New Zealand with their compliance requirements through software solutions and educational support.
The compliance process will vary significantly between businesses based on their size, services, client base, and company structure.
This variability means preparation should begin well in advance of the deadline.
“It is not something that can be left to the last minute,” he said.
“Each business needs education, support, good process and AML software to manage compliance requirements to ensure a minimum disruption to their operations.”
*What is Tranche 2 AML/CTF Legislation?
Tranche 2 refers to the proposed second phase of Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) reforms.
It is aimed at expanding the industries and professions that are required to comply with Australia’s AML/CTF laws.
Background:
- Australia’s current AML/CTF regime (Tranche 1), introduced in 2006, mainly covers financial services, gaming sectors, bullion dealers, and remittance services.
- However, Australia has long been criticised internationally (especially by the Financial Action Task Force, or FATF) for not extending these rules to other sectors.
- These gaps are seen as vulnerabilities that criminals can exploit to launder money or finance terrorism.
What Tranche 2 Would Cover:
Tranche 2 would extend obligations to what are called “Designated Non-Financial Businesses and Professions” (DNFBPs). This includes:
- Real estate agents
- Lawyers
- Accountants
- Trust and company service providers
What it Would Mean for Real Estate Agents:
If Tranche 2 is passed, real estate agents would have to:
- Conduct customer due diligence (e.g., verifying the identity of clients, understanding the purpose of the transaction).
- Report suspicious matters to AUSTRAC (the Australian Transaction Reports and Analysis Centre).
- Keep certain records for set periods (such as identity documents and transaction records).
- Implement risk-based AML/CTF compliance programs within their businesses.
It would make real estate agents responsible for helping detect and prevent illicit money entering Australia’s property market.