AUSTRAC Tranche 2 Explained: What Lawyers, Real Estate Agents, Conveyancers and Accountants Must Do Before 1 July 2026

Australia is about to make the biggest expansion of its anti-money laundering regime in two decades.

From 1 July 2026, around 90,000 additional firms, lawyers, conveyancers, real estate agents, property developers, accountants, tax agents, trust and company service providers, and dealers in precious metals and stones will become reporting entities under the AML/CTF Amendment Act 2024.

That is around five times the existing population of current AUSTRAC-regulated entities, and it will affect professional services that have never run a compliance program like this. AUSTRAC enrolment opened on 31 March 2026 and will close on 29 July 2026, so the window is a small one.

What Is the AML/CTF Tranche 2 Reform?

Tranche 2 is the second phase of Australia’s AML/CTF regime, and it extends reporting-entity obligations beyond banks and casinos to professional and property-adjacent services.

The legislative vehicle is the AML/CTF Amendment Act 2024 (Cth), which got Royal Assent on 10 December 2024. It amends the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) to add additional "designated services" to the regulated aspects.

The reforms also change the entire regime, for both current and new reporting entities, from a prescriptive, compliance-based model to a risk-based, outcomes-oriented framework. AUSTRAC’s summary of the change describes this as moving from "tick-box compliance" to measures tailored to the actual risks faced by the business.

At a glance: Australia first proposed extending AML/CTF coverage to lawyers, accountants and real estate almost 20 years ago, but successive governments put this off, and 1 July 2026 is the date the regulator is now planning around.

Who Is Now a “Reporting Entity”?

Firms are considered to be reporting entities if they provide one or more "designated services" with a geographical link to Australia in the course of carrying out their business.

The expansion affects the following professions:

The Law Society of NSW’s Law Society Journal (February 2026) lists nine categories of designated legal services. The key clarification the Society makes is that obligations apply when services “directly advance” a transaction, not when they provide strategic or theoretical advice.

In practice, this means that a lawyer giving general advice on a corporate structure is not captured by that act alone, but if the same lawyer drafts and lodges the documents, holds settlement funds or acts as a nominee director, they become a reporting entity.

For real estate, the position is more expansive. Gadens’ analysis confirms that the obligation applies to any service in connection with a sale, purchase or transfer of real property, regardless of price and if the agent is acting on behalf of the buyer or seller.

For accountants, CPA Australia’s Tranche 2 factsheet says the captured services include registered office services, assisting with restructures, acting as nominee director and holding or managing client money.

When Do the New Obligations Begin?

The Tranche 2 timeline has four key dates between Royal Assent and the enrolment deadline.

There are two things that are easy to miss. First, enrolment opened on 31 March 2026, not 1 July. Firms that wait until commencement to enrol risk their submission being late as the 29 July deadline will be when AUSTRAC’s enrolment portal is busiest.

Second, AUSTRAC expects AML/CTF programs to be in place by 30 June 2026, which is the day before designated services trigger obligations. The program shouldn’t be something firms build after they start providing regulated services, it needs to be in place on day one.

How Do I Enrol With AUSTRAC?

Enrolment is done via AUSTRAC Online, the same portal that existing reporting entities currently use. Firms create an account, complete the new enrolment form and submit a single application for the legal entity that’s providing designated services.

AUSTRAC’s enrolment guidance for new entities contains two important points:

Quick check: practices that have not enrolled by 29 July 2026, but are providing designated services from 1 July, are operating outside the AML/CTF Act’s enrolment requirements. Enrolment is the starting obligation and the rest of the program is built on top of it.

The professional bodies, Law Council of Australia, Queensland Law Society, Law Institute Victoria, Law Society of NSW, REIA, CA ANZ, CPA Australia, have all published guidance of varying depth.

What Are the Six Core Obligations for Reporting Entities?

Each Tranche 2 reporting entity must fulfil the same six obligations from 1 July 2026, regardless of their profession.

In practice, appointment of a compliance officer and the AML/CTF program are the two obligations most newly captured firms underestimate. The program is not a template document, it is a written reflection of the firm’s actual money-laundering and terrorism-financing risk.

AUSTRAC’s Program Starter Kits, released on January 30, 2026, help small practices structure that document, but they are just a starting point and not a finished product.

What Is Customer Due Diligence (CDD) Under Tranche 2?

CDD is the workflow the majority of firms will end up spending the most time on. CDD is the obligation to identify and verify customers before providing a designated service, and that risk picture will be kept current across the engagement.

AUSTRAC’s CDD rules introduce more prescriptive obligations than the existing regime, each tailored to different types of customer.

Different customer profiles attract different levels of CDD. Standard CDD is the default, while simplified CDD applies to lower-risk customers and enhanced CDD applies to higher-risk customers (politically exposed people, higher-risk jurisdictions, complex ownership structures, etc.).

The verification step is the bridge between Tranche 2 and the verification work a lot of firms are already doing. Lawyers and conveyancers run Verification of Identity (VOI) on every property file under ARNECC Schedule 8, and a clean VOI workflow already covers most of the CDD identity step.

The new requirement is the program around it, which involves risk assessment, beneficial-owner identification and ongoing monitoring.

For real estate agents and developers, who likely have never had to run a formal verification, the change is more complicated. The REIA AML/CTF resource hub and Law Society of NSW CDD guidance highlight this as the aspect with the most friction for the property sector.

What Are the Penalties for Non-Compliance?

Civil penalties under the AML/CTF Act are substantial and apply for each contravention.

These figures are confirmed in the BDO Australia analysis of the AML/CTF Amendment Act 2024 and cross-referenced by Grant Thornton’s reforms overview.

Penalty scale: a single significant contravention will cost $33 million for a body corporate. Multiple contraventions, such as failing to identify beneficial owners across a series of transactions, can multiply into much larger penalties. AUSTRAC also has graduated enforcement options for those who break the rules. They are infringement notices, enforceable undertakings, court-ordered remediation and civil penalty proceedings.

AUSTRAC has made it very clear that ignorance is not an acceptable defence. Firms cannot defer enrolment, point to professional-body silence or rely on having no prior AML/CTF experience to avoid penalties. The obligation is attached to the service, not the firm’s awareness of it.

How Does Tranche 2 Connect to Existing VOI Requirements?

For lawyers and conveyancers, Tranche 2 sits on top of the existing ARNECC Verification of Identity Standard when it comes to property matters. The two regimes share an identity-verification step but answer to different regulators.

The overlap looks like this:

At a glance: from 1 July 2026, property lawyers or conveyancers verifying a client’s identity will be doing two regulatory jobs at the same time: ARNECC VOI for the registry and CDD for AUSTRAC. The evidence must satisfy both.

Firms with a clean VOI workflow will already have most of the identity-verification step covered, while firms running ad hoc verification must build a single workflow that addresses both regimes at the same time.

Real estate agents and accountants do not currently have an existing ARNECC equivalent. Their identity-verification step will be brand new from 1 July 2026, so the program around it must be built from the ground up.

What Should Firms Be Doing Right Now?

The window before commencement is short. There are three phases to a defensible Tranche 2 readiness plan.

Firms will not need a separate compliance suite on top of an existing verification tool. The verification record is the foundation of CDD, which means the program, officer and reporting workflow sit above that foundation. They are governance, not software.

What This Means for Your Practice

Tranche 2 is the most significant regulatory change for Australian professional services since the AML/CTF Act itself in 2006. The compliance load is significant, the penalties are heavy and the window before 1 July 2026 is closing rapidly.

The firms that are ready are the ones treating Tranche 2 as a permanent workflow change, not a deadline to clear and then forget about. The compliance officer, the program, the CDD workflow and the records are the operating system of a reporting entity, designed to run year after year.

Every designated service provided from 1 July 2026 carries a CDD evidence trail that AUSTRAC may eventually ask to see.