From July 1, 2026, Australia’s anti-money-laundering and counter-terrorism-financing (AML/CTF) regime will undergo its most significant reform in decades. The reforms, known as “Tranche 2”, will extend AUSTRAC’s regulatory reach to more than 80,000 additional businesses, including lawyers, accountants, real estate professionals, conveyancers, and trust and company service providers.
This expansion marks a major policy shift. It brings Australia into closer alignment with international AML standards set by the Financial Action Task Force (FATF), which has long criticised Australia for lagging behind other jurisdictions in regulating professional “gatekeeper” sectors.
Key professions affected
Under the proposed AML/CTF reforms, a wide range of professional groups will become reporting entities whenever they provide a designated service with a link to Australia. This will include lawyers involved in client trust accounts, property settlements or the formation of companies, as well as conveyancers who handle property transfers or hold client money. Accountants and auditors will also fall under the regime when they manage client funds, establish entities or offer financial advice.
Real estate professionals will be captured when they facilitate property transactions, manage rental portfolios or accept deposits, and dealers in precious metals or stones will be included because of their exposure to high-value cash transactions. Trust and company service providers, too, will be covered when they set up structures or manage client entities.
In practice, all these professions will need to enrol with AUSTRAC and implement AML/CTF compliance programs similar to those already required of banks.
The new architecture of compliance
The compliance framework will be risk-based but mandatory. Each business will be required to, develop and maintain an AML/CTF Program, tailored to the business’s nature and size. This includes identifying and mitigating risks of money laundering and terrorism financing (ML/TF). They will also be required to Conduct Customer Due Diligence (CDD) before providing a designated service. This involves verifying a client’s identity, understanding their beneficial ownership structure, and assessing the purpose and nature of the business relationship. They may need to Report to AUSTRAC and Suspicious Matter Reports (SMRs) where transactions raise concerns about criminal activity; Threshold Transaction Reports (TTRs) for cash transactions of $10,000 or more; and International Funds Transfer Instructions (IFTIs) for relevant overseas transactions.
Among all that they must maintain records of due diligence, transactions, and reports for at least seven years. And need to train staff to recognise and report suspicious behaviour and to understand compliance obligations.
Prepare now not when it’s too late
While the regime does not commence until mid-2026, the transition period is critical. Professional bodies such as the Law Council of Australia, CPA Australia, and the Australian Institute of Conveyancers are already working with government and AUSTRAC to shape practical compliance pathways.
To prepare one will need to map their exposure which means they will need to identify which services constitute “designated services.” For example, conveyancing transactions, client trust account management, or company incorporation. Furthermore, they will need to assess client onboarding processes, or consider whether an existing identity verification and due diligence measures meet AML/CTF standards.
Also, a review of trust account procedures would ensure one has internal controls and reporting mechanisms. By engaging with the entity’s professional association one will garner industry-specific guidance which will be issued to help firms of all sizes comply.
Of course developing a budget for compliance is important. Smaller firms may face additional administrative burdens. Begin planning now for technology and staff training investments.
Importantly, professionals should recognise that due diligence begins before the engagement even starts. If an accountant, lawyer, or real estate agent takes on a new client, they may need to go beyond traditional identity verification. This could include conducting bankruptcy searches, ASIC background checks, or even police criminal record checks, especially for high-risk clients or transactions. Such measures demonstrate a proactive stance against potential misuse of professional services. In this new regulatory environment, professionals must adopt a “know-your-client before engagement” mindset. Conducting deeper pre-engagement checks helps prevent exposure to regulatory breaches and reputational damage.
Broader Implications for the Professions
The new regime will fundamentally alter the compliance culture in traditionally self-regulated professions. For lawyers and accountants, it raises sensitive issues of legal professional privilege and client confidentiality, particularly when reporting suspicious transactions.
AUSTRAC has indicated it will consult further to balance privacy and professional ethics with the need for transparency. Nonetheless, the shift signals that professional gatekeepers are now expected to share the responsibility of protecting the integrity of Australia’s financial system.
Real estate professionals, too, face new scrutiny. Australia’s booming property market has long been a vehicle for overseas and domestic laundering. Mandatory due diligence and reporting will transform how agents handle large transactions, especially those involving offshore clients or complex ownership structures.
The key takeaways for professionals
For professionals across the legal, financial and property sectors, the forthcoming reforms carry significant implications. The AML/CTF regime is set to expand its reach, bringing lawyers, accountants, conveyancers, real estate agents and other specialists involved in high-value transactions into a regulated framework for the first time. These obligations will formally commence on 1 July 2026, following a transition period designed to give industry time to prepare.
Every affected business will be required to enrol with AUSTRAC and comply with the full suite of AML/CTF program requirements. This includes conducting customer due diligence, submitting suspicious matter and threshold transaction reports, maintaining records for at least seven years, and ensuring staff are properly trained to recognise and respond to compliance risks.
Between now and the commencement date, firms are encouraged to examine their services and client processes, begin shaping a compliance plan, and introduce pre-engagement checks such as bankruptcy, police and ASIC searches. Professional bodies will play an important role in guiding practitioners through these changes, and early staff engagement and training will help ease the transition.
Ethical questions—particularly around client confidentiality and regulatory transparency—are expected to remain a point of discussion. Yet the reforms also present a strategic opportunity: businesses that start preparing now can position themselves as trusted, risk-aware operators in an increasingly regulated environment.
Conclusion
From 1 July 2026, the professional landscape will change dramatically. Whether you are a lawyer, accountant, real estate agent, or conveyancer, AML/CTF compliance will become a core regulatory duty, not an optional extra.
As AUSTRAC expands its oversight, professionals on the front line of major transactions will become essential partners in preventing financial crime. Early preparation, education, and risk management will be key to staying compliant—and protecting both your clients and your reputation.
*Tony Anamourlis is a tax law specialist in multinational transactions, negotiating with the Commissioner of Taxation and other regulators and is a regular contributor to Neos Kosmos.
