From 1 July 2026, Australian real estate agents are required to comply with the AML/CTF Act under Tranche 2. This article explains what that means in practice and how Workflow helps you meet your obligations simply and efficiently.
This article provides general information only. For advice specific to your business, consult a legal or compliance professional.
What AML/CTF means for real estate
AML stands for anti-money laundering. CTF stands for counter-terrorism financing. The laws exist to prevent criminals from using property transactions to move or conceal illegal funds.
Real estate has historically been a vehicle for this, which is why AUSTRAC is now extending formal compliance obligations to agents.
What does and doesn't apply
Tranche 2 applies to:
- Residential and commercial property sales where you act as the agent
- Buyer's agent services involving the purchase of real property
Tranche 2 does NOT apply to:
- Rental properties and property management — these are explicitly exempt
- Leasing, tenancy management, and property valuations
If you run both a sales and a property management business, you only need to run AML checks on sales transactions. Rental and PM work is out of scope.
What you need to do for each covered transaction
For each property sale, you are required to:
Verify the identity of your client (vendor, buyer, or both — depending on your engagement) before providing your service
Assess their risk level using a risk assessment questionnaire
Keep records of the check, assessment, and related documents for 7 years
Workflow handles all three of these steps.
When to run the check
You must complete the identity check and risk assessment before providing the designated service, typically at the time of listing — not at settlement, but at the point of engagement.
Best practice: run the check at listing appointment or when you sign the agency agreement.
Do I check the buyer, the seller, or both?
It depends on your role:
Vendor's agent (listing agent): Check your client, the vendor, and the buyer
Buyer's agent: Check your client — the buyer
The other party's agent is responsible for checking their own client. You are not required to check both sides if you only represent one.
What if the same client comes back for a new transaction?
If a client has been verified recently and their review period hasn't expired, you may be able to reuse their existing Workflow record without running a new check. Workflow will indicate whether a new check is needed.
What about companies?
If your client is an entity rather than an individual, you'll run a KYB (Know Your Business). Workflow handles this automatically and prompts you for entity details. You are required to do a KYC on any Director/Beneficial Owner with more than 25% ownership.
What about rental properties?
No — rental properties and property management services are exempt from Tranche 2 obligations. You do not need to run AML checks on tenants or landlords for rental transactions.
What are the risks of non-compliance?
AUSTRAC can issue significant financial penalties for non-compliance. More importantly, failing to conduct proper CDD could expose your business to legal and reputational risk if a transaction is later found to involve money laundering.
Compliance is straightforward with the right system in place. Workflow is designed to make this as simple as possible for real estate agents — most checks take under two minutes for the client.
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