- From 1 July 2026, property developers who sell directly to buyers without an independent agent become reporting entities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
- This includes developers selling house and land packages, off-the-plan apartments, and subdivision lots using in-house sales teams.
- Obligations include registering with AUSTRAC, implementing an AML/CTF program, conducting customer due diligence, and filing suspicious matter reports.
- Penalties for non-compliance are severe — up to $33 million for businesses and $6.6 million for individuals.
- Developers who exclusively use independent, external real estate agents to sell their product are likely not captured by the reforms.
Australia has long been criticised internationally for not extending its anti-money laundering laws to so-called "gatekeeper" professions — real estate agents, lawyers, accountants, and trust and company service providers. That gap is now closing. The Anti-Money Laundering and Counter-Terrorism Financing Amendment Act, passed in late 2024, introduces sweeping reforms that bring these sectors under the AUSTRAC regulatory umbrella for the first time. For property developers, particularly those who conduct direct sales, the implications are significant and the clock is ticking.
What Is the AML/CTF Reform?
The reform represents the long-awaited "Tranche 2" expansion of Australia's AML/CTF regime. Since 2006, the Anti-Money Laundering and Counter-Terrorism Financing Act has regulated financial services, gambling, and bullion dealing. However, Australia remained one of the few FATF member countries that had not extended these obligations to real estate, legal, and accounting professionals — sectors widely recognised as vulnerable to money laundering.
The amendment act extends the regime to new classes of "designated services," meaning that businesses providing these services will become "reporting entities" with obligations to identify, mitigate, and report money laundering and terrorism financing risks. Real estate is front and centre in these reforms.
When Does It Take Effect?
Registration with AUSTRAC opened on 31 March 2026 for newly regulated industries. The majority of AML/CTF obligations commence on 1 July 2026. Newly regulated entities must enrol and register with AUSTRAC by 29 July 2026 — 28 days after the commencement date. Failure to enrol by the prescribed date may result in daily fines of up to $19,800 for businesses and $3,960 for individuals.
1 July 2026 — AML/CTF obligations commence for real estate and property development businesses. Registration with AUSTRAC is open now.
Which Property Developers Are Caught?
This is the critical question, and the answer depends on how you sell your product. The new designated service that captures property developers is defined as "selling or transferring real estate without an independent real estate agent as part of a business selling real estate." In practical terms, this means property developers who sell house and land packages, off-the-plan apartments, or blocks of land in new subdivisions using their own in-house sales or marketing employees — rather than engaging an external, independent agency — will be classified as reporting entities.
If you only use independent, external real estate agents to sell your properties, you are likely not captured by these reforms. If you sell directly — through in-house staff, your own sales suite, or without an agent — you are a reporting entity and must comply.
This distinction is crucial for developers to understand. Many smaller developers in South Australia handle their own sales, particularly on subdivision projects or when selling land directly to builders or end purchasers. Under the new regime, these developers will need to implement compliance frameworks that were previously reserved for banks and financial institutions.
What Are the Obligations?
Reporting entities under the AML/CTF Act must comply with a range of obligations. These are not optional, and they carry real consequences for non-compliance.
1. Enrol and Register with AUSTRAC
All newly regulated entities must enrol and register with AUSTRAC. This is the first step and it is a legal requirement. Registration is now open and must be completed by 29 July 2026.
2. Develop an AML/CTF Program
Every reporting entity must develop and maintain a written AML/CTF program tailored to their business. This program must identify and assess the money laundering, terrorism financing, and proliferation financing risks specific to the services you provide. It must document the policies, procedures, systems, and controls you have in place to manage and mitigate those risks. The program should be proportionate to the nature, size, and complexity of your business — a small developer selling four lots will have different requirements to a national project marketing firm — but it must be documented, regularly reviewed, and kept up to date.
3. Appoint a Compliance Officer
Each reporting entity must appoint a fit and proper person as their AML/CTF compliance officer. This person is responsible for overseeing the implementation and maintenance of the program. For smaller developers, this may be the director or principal, but it must be a nominated individual with appropriate authority.
4. Conduct Customer Due Diligence
Before providing a designated service, you must conduct customer due diligence on your buyers. This means identifying and verifying the identity of your customer and certain associated persons, such as beneficial owners of corporate entities. The reforms adopt a risk-based approach, meaning the level of due diligence should be proportionate to the risk. For a straightforward sale to a local individual purchaser, the requirements will be less onerous than for a complex purchase through an overseas corporate structure. At a minimum, you must verify identity using reliable and independent documentation or electronic verification before or at the time of providing the service.
5. Ongoing Monitoring
Customer due diligence is not a one-off exercise. Reporting entities must conduct ongoing monitoring of their business relationships and transactions to detect unusual or suspicious activity. This includes updating customer information and remaining alert to transactions that do not align with your knowledge of the customer.
6. Suspicious Matter Reporting
If you form a reasonable suspicion that a transaction or activity may be related to money laundering, terrorism financing, or another serious offence, you must file a suspicious matter report with AUSTRAC. These reports must be submitted within specific timeframes, and importantly, you must not "tip off" the customer that a report has been made. This obligation applies to all reporting entities regardless of the size of the transaction.
7. Record Keeping
All records relating to customer identification, transactions, and your AML/CTF program must be retained for at least seven years. Records must be accurate, complete, and readily accessible.
What Does This Mean in Practice for Developers?
For a typical South Australian developer selling a small subdivision — say four to ten lots — the practical impact will depend on how they currently sell. Consider the following scenarios.
A developer who engages an independent real estate agent to list and sell all lots is likely not providing a designated service and would not be captured. The agent, however, would be a reporting entity and would need to comply with the obligations outlined above.
A developer who sells lots directly to purchasers, whether through their own website, at a sales office, through personal networks, or using in-house sales staff, is providing a designated service. They will need to register with AUSTRAC, develop a compliance program, verify the identity of every purchaser, monitor transactions, and report any suspicious matters.
A developer who uses a mix of both — selling some lots through an agent and others directly — will be captured for the direct sales. The safest approach in this case is to implement a full compliance framework.
Penalties for Non-Compliance
The penalties under the AML/CTF Act are substantial and should not be underestimated. AUSTRAC has the power to issue infringement notices, give remedial directions, accept enforceable undertakings, and seek civil penalty orders through the courts. Civil penalty orders can reach up to $33 million for businesses and $6.6 million for individuals. Even the failure to register by the prescribed date attracts daily fines of up to $19,800 for businesses. AUSTRAC has demonstrated in recent years — through enforcement actions against major banks and casinos — that it is prepared to pursue significant penalties for non-compliance.
Red Flags for Property Developers
AUSTRAC has identified a number of money laundering indicators relevant to the real estate sector that developers should be aware of. These include buyers who are reluctant to provide identification or verification documents, purchases made through complex or opaque corporate structures where the beneficial owner is difficult to identify, transactions involving unexplained urgency or pressure to settle quickly, buyers who are indifferent to the price or terms and show no interest in negotiation, the use of large cash deposits or deposits from unusual or unrelated third parties, requests to structure transactions in a way that appears designed to avoid reporting thresholds, and properties being purchased well above market value without clear justification.
Developers should train their sales staff and anyone involved in the transaction process to recognise these indicators and escalate them to the nominated compliance officer.
How to Prepare Before 1 July 2026
The commencement date is approaching quickly, and developers who have not yet started preparing should act now. The following steps provide a practical starting point.
- Determine whether your business provides a designated service — specifically, whether you sell or transfer real estate directly without an independent agent.
- Register with AUSTRAC. Enrolment is now open for newly regulated entities.
- Appoint an AML/CTF compliance officer within your organisation.
- Develop a written AML/CTF program that identifies and assesses the money laundering and terrorism financing risks specific to your business and documents your policies and procedures for managing those risks.
- Implement customer due diligence procedures, including identity verification processes for all purchasers. Consider engaging a digital verification provider to streamline this.
- Establish a process for ongoing transaction monitoring and suspicious matter reporting.
- Train all staff who are involved in sales, marketing, or settlement processes on your AML/CTF obligations and how to identify suspicious activity.
- Review your record-keeping systems to ensure they can store customer identification and transaction records for at least seven years.
- Seek legal advice from a lawyer experienced in AML/CTF compliance to review your program before 1 July 2026.
AUSTRAC has indicated it will publish tailored guidance and a starter program kit for small, low-complexity businesses in the newly regulated industries. Monitor the AUSTRAC website for updates as these resources become available.
The Bigger Picture
These reforms are not just a compliance exercise. Australia's property sector has been identified globally as a significant vulnerability in the fight against money laundering. The FATF — the international body that sets anti-money laundering standards — has repeatedly flagged Australia's failure to regulate real estate professionals as a material weakness. These reforms bring Australia into line with international expectations and with the regimes already operating in the United Kingdom, Canada, the European Union, and New Zealand.
For legitimate developers, the reforms should ultimately be a positive development. They create a more transparent market, reduce the risk of unknowingly facilitating illicit transactions, and contribute to the integrity of Australia's property sector. The compliance burden is real, particularly for smaller operators, but the frameworks being introduced are risk-based and proportionate. Developers who approach this proactively — rather than waiting for enforcement — will be best positioned.
Frequently Asked Questions
Does this apply to all property developers?
No. The reforms specifically capture developers who sell or transfer real estate directly to purchasers without using an independent external real estate agent. If you exclusively use an independent agent for all sales, you are likely not captured. However, if you conduct any direct sales — even partially — you should seek advice on your obligations.
What if I use a project marketing company rather than a traditional agent?
The key question is whether the marketing company is acting as an independent agent or whether the developer retains control of the sales process. If the project marketer is genuinely independent and holds their own real estate licence, the developer may not be captured. Seek specific legal advice on your arrangement.
Do I need a compliance officer if I am a sole director?
Yes. The nominated compliance officer can be the director or principal of the business. The requirement is that someone with appropriate authority is formally responsible for the AML/CTF program.
What is a suspicious matter report and when do I need to file one?
A suspicious matter report must be filed with AUSTRAC when you form a reasonable suspicion that a transaction or activity may relate to money laundering, terrorism financing, tax evasion, or another serious offence. You must file the report within the prescribed timeframe and must not disclose to the customer that a report has been made.
What customer due diligence do I need to perform?
At a minimum, you must verify the identity of the purchaser using reliable documentation such as a driver's licence or passport, or through electronic verification. For corporate purchasers, you must also identify beneficial owners. The level of due diligence should be proportionate to the assessed risk of the customer and transaction.
What records do I need to keep?
You must retain customer identification records, transaction records, and records relating to your AML/CTF program for at least seven years. Records must be accurate, complete, and readily accessible for inspection by AUSTRAC.
These reforms represent a significant shift for Australia's property industry. Developers who act early, seek good advice, and build compliance into their business processes will manage the transition smoothly. Those who ignore the changes risk not only substantial penalties but reputational damage in an increasingly regulated market.
General information only, not financial, tax, or legal advice. Seek independent advice for your circumstances.