What is AML/CTF and why Tranche 2 matters for real estate

If you work in real estate, you’ve likely heard more about AML/CTF recently, especially with Tranche 2 coming into effect. From 1 July 2026, Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) laws will extend to the real estate sector.

This means real estate professionals who facilitate buying, selling, or leasing property will be required to meet new compliance obligations. While this change may feel significant, the experience of similar markets shows it’s manageable with the right preparation and tools.

What is AML/CTF, in simple terms?

AML/CTF legislation is designed to protect our economy from financial crime – such as money laundering or terrorism financing. Money laundering is when criminals hide the origins of their illegal funds by undertaking a series of transactions, typically using complex structures, false identities, and local/international facilitators (e.g. real estate agents). Terrorism financing is when funds are made available for terrorist activities and uses the same series of mechanisms as money laundering – which is why they are grouped together.

Real estate businesses will soon be required to:

• Verify client identities
• Understand ownership structures (including companies and trusts)
• Evaluate client risk
• Keep records and report suspicious activity
• Train staff to spot potential red flags

…and more

Why Real Estate?

Real estate is globally recognised as a sector vulnerable to money laundering, for several reasons:

• Property transactions involve high-value assets, making them attractive for moving and concealing large sums
• Funds can be moved through property purchases with minimal scrutiny
• Historically, the industry has operated with limited AML-specific obligations in Australia

Extending AML/CTF compliance to real estate helps prevent agencies from being used as a conduit for money laundering and terrorism financing, and reinforces the industry’s standing as a trusted and transparent part of the economy.

What will this mean for your business?

AML/CTF obligations will require updates to your processes, systems and staff knowledge.

New Zealand real estate agencies experienced a similar transition in 2019, and many found that with the right support, compliance quickly became part of day-to-day operations.

                  “Having a thorough understanding of the Act and how to specifically apply this to your business is imperative - knowledge and experience are the key to a smooth transition. I believe this is necessary to build a positive ‘Culture of Compliance’.”

• Ann-Marie Payne, AML Compliance Manager, Harcourts Holmwood

Learn from those who’ve done it before

When New Zealand rolled out its AML/CTF legislation to real estate back in 2019, their agencies had the same concerns as Australian agencies have now. But all were able to successfully embed AML compliance into their processes with the right tools and support.

“Choose compliance tools that integrate smoothly with existing systems to minimise disruption. We have found AMLHUB to be a life saver as it is an exceptional programme that covers every aspect of the requirements for the collection of all data associated with AML/CTF.”

• Lyn Beere, National Compliance Manager, NZ Sotheby’s International Realty

Lessons worth learning

We’ve compiled insights from three experienced compliance leaders in New Zealand real estate. In this guide they share what worked for their agencies, what to watch out for, and how Australian agencies can get ahead now.

“Don’t do it alone. It is bigger than it looks. It impacts not only your internal real estate processes, but your compliance with other legislation, such as privacy.”

• Lisa Gerrard, In-house General Counsel, Barfoot & Thompson

Download the guide: Lessons Learned