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Article Summary
From 1 July 2026, many property developers will become subject to Australia’s AML/CTF regime and AUSTRAC oversight. The changes introduce significant compliance obligations, including customer due diligence, reporting requirements and AML/CTF program implementation.
From 1 July 2026, Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime will apply to people who provide certain “real estate services”, including property developers. Property developers will be subject to new compliance obligations which will be monitored by AUSTRAC.
Why property developers?
Real estate transactions have long been considered a major channel for laundering illicit funds, allowing criminals to conceal, move and clean money, and therefore to be at high risk for money laundering activities. Property developers are an important participant in the real estate market and as such developers will be bound by the AML/CTF regime, to try and stamp out the use of real property in money laundering and counter-terrorism financing activities. The changes bring Australia into line with international standards.
Real estate services
Parties who provide certain “designated services” will be bound by the AML/CTF regime from 1 July. The real estate services that are listed in the Act are:
- brokering the sale, purchaser or transfer of real estate in the course of carrying on a business; and
- selling or transferring real estate in the course of carrying on a business selling real estate, where the sale or transfer is not brokered by an independent real estate agent.
As many property developers sell their own stock without engaging an agent, those property developers will need to comply with the regime.
How to comply
Complying with the Act requires the following to be undertaken:
- register with AUSTRAC before 1 July;
- develop and implement an AML/CTF program that is appropriate and specifically tailored for the developer’s business before 1 July;
- train its staff in the operation of their program before 1 July and on an ongoing basis;
- identify AML/CTF roles, including to appoint a Compliance Officer who meets the requirements in the legislation;
- carry out due diligence on relevant personnel before 1 July and on an ongoing basis in relation to each buyer, undertake customer due diligence (CDD), which requires an assessment to be made as to whether the buyer is low, moderate or high risk and for certain investigations to be made into the buyer and the source of their funds;
- select an appropriate method (physical or digital) for CDD including in a way which stores AML/CTF records with search capability (selecting a technology partner may require significant investigations including as to existing software system API integrations capability);
- from 1 July, report any suspicious transactions to AUSTRAC;
- maintain accurate records of all transactions and steps taken to comply with the legislation; and
- continually review and adjust the developer’s AML/CTF program.
Failure to comply
AUSTRAC can issue infringement notices, fines and remedial directions for non-compliance with AML/CTF obligations.
AUSTRAC has been clear to date that it does not expect perfect compliance from the start, however it does expect to see newly regulated businesses making a genuine attempt to comply with the law.
Conclusion
The inclusion of property developers as being bound under the AML/CTF regime is a significant regulatory shift. Property developers will now be classified as reporting entities if they provide designated services, such as selling or transferring real estate, coordinating financial settlements, or holding transaction funds. These activities are considered high-risk for money laundering, as real estate transactions have historically been exploited for illicit financial activities.
These changes represent a substantial regulatory change for developers and developers should act promptly to understand their new obligations and implement the necessary compliance measures before 1 July 2026.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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