AML/CTF Tranche 2 for Conveyancers in Australia

A practical AML/CTF roadmap for busy conveyancing practices

You sit at the centre of almost every property transaction in Australia. You see the contract, the parties, the price, the payments and the way the deal is structured. That visibility is exactly why criminals love the conveyancing process – and why Tranche 2 for conveyancers is now a reality.

From 1 July 2026, conveyancers who facilitate the sale and purchase of property will be regulated under Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime, alongside lawyers, accountants, real estate professionals, dealers in precious metals and stones, and trust and company service providers.

The good news is that you do not need to become a financial crime expert overnight. With a clear plan – and the right support – you can embed AML/CTF obligations into your existing workflows and use Tranche 2 for conveyancers as a way to demonstrate professionalism and trust to clients, banks and regulators.

The regulatory backdrop: why conveyancers are now in scope

Australia’s AML/CTF regime has long covered banks, remitters, casinos and a limited set of other businesses. However, for many years international bodies such as the Financial Action Task Force (FATF) have criticised the exclusion of “gatekeeper” professions like lawyers, conveyancers, accountants and real estate agents, which are heavily used to move and conceal illicit funds.

In November 2024, Parliament passed the AML/CTF Amendment Bill 2024, which amended the AML/CTF Act and laid the foundation for Tranche 2.austrac.gov.au+1 AUSTRAC’s AML/CTF Reform hub confirms that, from 1 July 2026, new services and entities – including conveyancers – will fall under the reformed laws.

Key points from the official reform material:

• Tranche 2 brings into scope services typically provided by lawyers, conveyancers, real estate agents, accountants, dealers in precious metals and stones, and trust and company service providers.

• AUSTRAC has released new AML/CTF Rules 2025 and is progressively publishing core guidance and sector-specific indicators to help newly regulated entities prepare.

For conveyancers, this is not just an abstract legal shift. It is a direct recognition that property transfers – particularly when you are the one preparing and lodging instruments – can be used to legitimise criminal proceeds if controls are weak.

Who is caught by Tranche 2 for conveyancers?

Not every activity undertaken by a legal practice or a conveyancing business will trigger AML/CTF obligations. The focus is on services that facilitate the sale and purchase of property.

AUSTRAC’s reform material on new industries and services to be regulated and its “check if you may be regulated” tool confirm that conveyancers providing certain real estate-related designated services will be treated as Tranche 2 entities.

Industry guidance and legal commentary clarify that:

• A conveyancer who prepares contracts, transfers and settlement documents and helps execute the transfer of title after buyer and seller have agreed terms is considered to be assisting with the transaction and therefore in scope of Tranche 2.

• A practitioner who only provides high-level advice on the legal effect of terms, without taking steps to carry out the transfer or hold client money, may fall outside the designated services, depending on how their work is structured.

• The clearest public explanation for the profession is AUSTRAC’s own reform pages, together with AUSTRAC’s “check if you may be regulated” guidance:

• AML/CTF Reform – AUSTRAC

• New industries and services to be regulated (Reform) – AUSTRAC 

• Check if you may be regulated (Reform) – AUSTRAC 

If your firm regularly:

• prepares contracts, transfers and caveats

• manages settlement and disbursement of funds

• acts for buyers and sellers in residential or commercial property transactions

then Tranche 2 for conveyancers is almost certainly going to apply to you.

 Tranche 2 timelines: what conveyancers need by when

AUSTRAC’s Summary of obligations (Reform) and the Tranche 2 obligations factsheet set out the key milestones.

For conveyancers, the headline timetable is:

• Now – mid-2025

  • Understand whether your firm is in scope using AUSTRAC’s “check if you may be regulated” tool.

  • Begin high-level planning for Tranche 2 for conveyancers, including governance, risk assessment and likely system changes.

• Late 2025 – early 2026

  • AUSTRAC is rolling out detailed core guidance on AML/CTF programs, customer due diligence and reporting under the reformed laws.

  • Conveyancers should draft their AML/CTF program, design forms and checklists, and start mapping how AML checks will fit into matter workflows.

• 1 July 2026 – go-live date

  • AML/CTF obligations commence for Tranche 2 entities, including conveyancers who provide designated services with a geographical link to Australia.

  • You must not provide a designated service unless your AML/CTF program is documented and approved by a senior manager.

  • Within 28 days of first providing a designated service (and no later than 29 July 2026)

  • Newly regulated reporting entities must enrol with AUSTRAC, provide business details and keep them up to date.

Given how tight that timetable becomes once you factor in file volumes, staff training and potential system changes, waiting until 2026 to think about Tranche 2 for conveyancers is risky.

Core AML/CTF obligations for conveyancing firms

Once you fall within Tranche 2, AUSTRAC will treat your business as a reporting entity. That brings a core set of obligations which are the same across the regime but must be tailored for conveyancing work.

Enrolment with AUSTRAC

Conveyancers providing designated services must:

• enrol with AUSTRAC within the required timeframe

• provide accurate information about business structure, key personnel and contact details

• update those details when they change.

AML/CTF program (Part A and Part B)

AUSTRAC’s core guidance explains that an AML/CTF program has two parts:

• Part A – policies, procedures, systems and controls to identify, mitigate and manage ML/TF/PF risks

• Part B – detailed customer identification and verification procedures (KYC).

Your program must be:

• documented

• approved by a senior manager

• based on your ML/TF/PF risk assessment

• implemented and kept up to date.

For Tranche 2 for conveyancers, Part A should reflect:

• the types of matters you handle (e.g. residential, commercial, off-the-plan, related-party transfers)

• your client base (local individuals, foreign clients, companies, trusts, developers)

• how you deliver services (in-person, remote, via e-conveyancing platforms).

ML/TF/PF risk assessment

AUSTRAC emphasises that AML/CTF is risk-based. You must identify and assess the money laundering, terrorism financing and proliferation financing risks your business faces, using factors such as customer types, products, delivery channels and geographic exposure.

For conveyancers, that means assessing risks associated with:

• high-value property and commercial transactions

• foreign buyers and sellers

• complex company and trust structures

• related-party deals and asset transfers

• clients from higher-risk jurisdictions or sectors.

This risk assessment should drive your customer risk ratings and the level of due diligence you apply. AUSTRAC’s risk insights and indicators for the legal profession and the real estate sector are explicitly referenced as resources you must consider when assessing ML/TF risks.

Customer due diligence (CDD)

AUSTRAC’s customer due diligence (Reform) guidance makes it clear that you must:

• conduct initial CDD before providing a designated service (with limited exceptions for delayed CDD)

• identify and verify customers and beneficial owners using documented procedures

• assign a risk rating to each customer and matter, informed by AUSTRAC’s sector-specific indicators

• perform ongoing CDD to keep information up to date and spot changes in risk

• apply enhanced CDD where risk is higher, for example foreign politically exposed persons, complex structures, unusual transaction patterns or high-risk jurisdictions

For Tranche 2 for conveyancers, practical CDD steps will include:

• verifying identity of buyers and sellers (and authorised representatives)

• identifying and verifying beneficial owners of companies and trusts

• collecting source of funds / source of wealth information for higher-risk matters.

• screening parties against sanctions and PEP lists using appropriate tools.

Monitoring and reporting

As a reporting entity, your conveyancing firm must monitor for unusual activity and report certain matters to AUSTRAC. The core obligations include:

• Suspicious matter reports (SMRs) – when you suspect a person or transaction might be linked to crime, ML/TF/PF or identity issues.

• Threshold transaction reports (TTRs) – for transfers of physical cash of A$10,000 or more (or foreign currency equivalent) as part of providing a designated service

• International funds transfer reporting and cross-border currency reports, where relevant.

• AUSTRAC provides detailed guides on reporting to AUSTRAC (Reform) and on how to write high-quality SMRs and TTRs.

Record-keeping, training and independent review

You must:

• keep records of CDD, transactions, SMRs/TTRs, your AML/CTF program, training and independent reviews for at least the prescribed period (typically seven years)

• provide ML/TF risk awareness training to relevant staff, aligned to your Part A program.

• ensure independent reviews of Part A of your AML/CTF program on a risk-based cycle.

Red flags for ML/TF/PF risk in conveyancing matters

AUSTRAC has published comprehensive risk insights and suspicious activity indicators for the real estate sector, legal professionals and other Tranche 2 entities. Conveyancers should use these as the backbone of their own red-flag lists.

Customer behaviour red flags

Consider heightened risk (and potential SMR) where a client:

• is evasive or reluctant to provide identification or beneficial ownership information

• insists on minimal or purely online contact for a high-value matter without good reason

• appears to be controlled by a third party who is not formally on the record

• pushes hard to rush settlement or avoid normal checks and explanations

• abruptly withdraws from a transaction when asked for source-of-funds information.austrac.gov.au+2austrac.gov.au+2

Profile and structure red flags

Risk increases where:

• the party has high-value assets with no clear funding source

• there is a complex company or trust structure owning a residential property without a commercial explanation

• there are adverse media links to fraud, corruption, tax evasion or organised crime

• the client is a politically exposed person (PEP), or closely linked to one

• purchasers or vendors are based in high-risk jurisdictions or secrecy havens.

Transaction and payment red flags

In the context of Tranche 2 for conveyancers, pay particular attention to:

• deposits or settlement funds paid in large cash amounts or structured cash transactions below reporting thresholds

• third-party payments with no obvious connection to the buyer or seller

• rapid back-to-back sales at different prices without clear economic rationale

• property transferred at significantly above or below market value

• frequent last-minute changes to payment instructions or recipient accounts

• requests to refund funds to different parties or jurisdictions.

Matter and jurisdiction red flags

Other warning signs include:

• repeat instructions involving high-risk sectors or professions on the buyer or seller side

• unexplained use of offshore companies or trusts in simple residential deals

• transactions linked to sanctioned countries or regions with weak AML controls

• use of cryptocurrency or virtual assets in funding structures that do not match the client’s profile.

Your AML/CTF program should embed these indicators into matter-opening checklists, risk-rating tools and escalation procedures so that fee-earners can recognise patterns early.

Best practices for conveyancers under Tranche 2

To make Tranche 2 for conveyancers workable, the focus should be on simple, repeatable habits rather than heavyweight manuals no one reads.

Build a realistic, written risk assessment

Start by documenting:

• the main types of matters you see (e.g. first-home buyers, investors, SMSF purchases, related-party transfers)

• the mix of local versus overseas clients

• the common funding patterns (bank-mortgaged, cash buyers, private lenders)

• your delivery channels (in-office, remote, referrers, panel work).

Use AUSTRAC’s risk-based approach and risk assessment (Reform) guidance, together with the sector-specific risk insights, to structure this assessment properly.

Design an AML/CTF program that mirrors your workflow

Rather than writing a generic policy and trying to force your practice into it, start with your current conveyancing process and overlay AML/CTF requirements at each stage:

1. Enquiry and engagement – matter risk questions, initial CDD expectations.

2. Pre-contract – confirm identities, beneficial ownership, initial risk rating.

3. Exchange and pre-settlement – source-of-funds checks, ongoing CDD, screening hits and red-flag review.

4. Settlement and post-settlement – monitor payment flows, consider SMR triggers, complete records.

AUSTRAC’s AML/CTF program (Reform) and develop your AML/CTF program guidance provide the high-level structure; your job is to translate this into clear steps and templates staff can actually follow.

Standardise CDD and source-of-funds checks

Create standard forms and scripts so that fee-earners feel comfortable asking:

• Who is the beneficial owner behind this company or trust?

• How was the purchase money accumulated?

• How are funds moving into and out of the trust account?

Use AUSTRAC’s customer identification and verification and source of funds / wealth guidance as anchors when drafting these templates.

Train your team using real conveyancing examples

Generic training does not stick. Tailor ML/TF/PF training to:

• local case studies and AUSTRAC’s legal and real estate risk insights

• the way your firm handles instructions, trust money and e-conveyancing platforms

• common referral patterns (agents, brokers, lenders).

AUSTRAC’s e-learning modules and suspicious matter reporting reference guide can be used as a foundation, topped up with firm-specific sessions.

Use technology sensibly

You do not need a bank-grade system, but you do need:

• reliable electronic ID and verification tools

• sanctions and PEP screening appropriate to your risk level

• simple workflows for SMR and TTR decisions with an audit trail.

Many e-conveyancing and legal-tech providers are already adding AML features ahead of Tranche 2 for conveyancers; AUSTRAC’s own guidance on outsourcing and reliance can help you structure those relationships correctly.

Common Tranche 2 challenges for conveyancers

Across the market, conveyancing firms tend to face similar stumbling blocks.

Time pressure vs compliance

Conveyancing is deadline-driven. Exchange and settlement dates are often immovable, and there is a natural fear that adding AML steps will slow everything down. Industry commentary and interviews with AUSTRAC leadership stress that reforms are not designed to “break” businesses, but they do require earlier planning and more structured checks.

The practical answer is to:

• move key checks upstream (for example, at instruction stage rather than the day before settlement)

• use templates and digital tools to reduce manual effort

• educate referrers and clients early about new requirements.

Fragmented processes across offices and referrers

Many conveyancing practices rely on a mix of branches, panel appointments and referrers. Each may have slightly different practices. Under Tranche 2 for conveyancers, AUSTRAC expects a consistent AML/CTF program across the firm, even if some detail is localised.

Limited internal AML expertise

Most conveyancers were not trained to be AML specialists. The AML/CTF Rules 2025 and associated guidance run to well over a hundred pages of technical detail.

For many practices, trying to decode this alone quickly becomes overwhelming.

Integrating with existing systems

Firms already rely heavily on:

• practice management software

• PEXA and other e-conveyancing platforms

• trust accounting systems.

The challenge is to weave AML controls into this stack without forcing staff to double-key information. Many providers are building AML features, but someone still needs to design and govern how these are used within your Tranche 2 for conveyancers framework.

How Tranche 2 consultants can support conveyancing firms

This article sits on the blog of a firm that lives and breathes AML/CTF for Tranche 2 entities. Our role is to help conveyancers turn regulatory change into a clear, workable set of processes.

A typical engagement to support Tranche 2 for conveyancers would include:

Scoping and readiness review

• Map your current services against AUSTRAC’s new industries and services guidance and confirm exactly where you are a reporting entity.

• Review your existing client onboarding, trust account processes and file workflows to identify what already supports AML and what needs to change.

Risk assessment and AML/CTF program design

• Conduct or refine your ML/TF/PF risk assessment, drawing directly on AUSTRAC’s sector-specific risk insights for legal and real estate professionals

• Draft a tailored AML/CTF program (Part A and Part B) that matches how your firm works, aligned with AUSTRAC’s reform guidance.

Practical tools, templates and workflows

We turn policy into practice by creating:

• CDD and source-of-funds questionnaires specific to conveyancing

• matter-opening risk-rating tools

• checklists for higher-risk scenarios (e.g. foreign buyers, complex structures, related-party transfers)

• SMR/TTR decision trees and recording templates.

Technology and outsourcing strategy

Using AUSTRAC’s guidance on outsourcing and reliance, we help you:

• evaluate AML modules in existing systems (practice management, PEXA-linked tools, RegTech solutions)

• define what you will do in-house and what you may outsource, without abdicating responsibility

• ensure audit trails are complete and easy to evidence.

Training, change management and independent review

Finally, we support you to:

• deliver engaging training tailored to fee-earners, support staff and principals

• prepare for AUSTRAC engagement and the Tranche 2 go-live

• plan and execute independent reviews of your Part A program at a sensible cadence.

The aim is straightforward: you focus on running a modern, profitable conveyancing practice; we help you build an AML/CTF framework that stands up to regulatory scrutiny and protects your reputation.