Tranche 2 AML/CTF obligations commenced for real estate agents, along with other newly regulated professions, on 1 July 2026. That means the questions for agencies have shifted from whether they will be regulated to whether their monitoring, reporting and record-keeping actually work on the ground. This article sets out what an operational transaction monitoring capability needs to look like for a real estate agency now that Tranche 2 is live, not proposed.
Why real estate is a Tranche 2 priority
Real estate has long been flagged in Australia's national risk assessments as a channel for laundering illicit funds, because property transactions allow large sums to move in a single deal, require relatively little planning, and can generate further funds through resale. Tranche 2 brings real estate agents, alongside lawyers, accountants, trust and company service providers, and dealers in precious metals and stones, into the same AML/CTF regime that has applied to banks and other reporting entities for years.
Since 1 July 2026, real estate agents providing designated services must be enrolled with AUSTRAC, hold a tailored AML/CTF programme, conduct initial and ongoing customer due diligence, and monitor and report on transactions and suspicious activity.
What ongoing transaction monitoring actually requires
Monitoring is not a one-off check at settlement. Reporting entities need a process for reviewing customer and transaction activity on an ongoing basis, so that a change in behaviour, an unusual funding source, or a transaction pattern that does not fit a customer's stated purpose can be identified and escalated rather than missed.
For an agency without an existing compliance function, this typically means a documented set of triggers for enhanced scrutiny (cash-heavy purchases, unrelated third-party funding, rapid on-sale, politically exposed or high-risk clients), a clear escalation path when a trigger fires, and a record of what was reviewed and why a decision was made, since AUSTRAC and, ultimately, auditors will expect to see the reasoning, not just the outcome.
The reporting obligations that sit alongside monitoring
Monitoring feeds two report types real estate agents must now be ready to lodge. A threshold transaction report is required when a designated service involves a transfer of physical or e-currency of AUD 10,000 or more; a suspicious matter report is required when the agency forms a suspicion, on reasonable grounds, that a customer or transaction is linked to crime, money laundering or terrorism financing, regardless of dollar value, and even where the transaction never completes.
AUSTRAC introduced new TTR and SMR forms in AUSTRAC Online from 1 July 2026, the same date Tranche 2 obligations began, designed to collect more detailed data and improve reporting quality. Newly regulated agencies use the new forms from day one, so there is no legacy version to fall back on while getting used to the system.
Building this without an existing compliance function
Most real estate agencies are starting from a much smaller compliance base than a bank or a large accounting firm. The practical path is to combine a tailored, risk-based AML/CTF programme with tools that automate the parts that do not need human judgement: identity verification at onboarding, ongoing screening for politically exposed persons and sanctions matches, and a structured audit trail for due diligence decisions, so staff time is spent on genuine judgement calls rather than manual record-keeping.
Enrolment, an AML/CTF programme and staff training are foundational, but a programme that exists on paper without a working monitoring and escalation process behind it will struggle the first time AUSTRAC asks to see how a suspicious matter report was arrived at.
