Anti-Money Laundering
DEVELOPERS UNDER MICROSCOPE AS PROPERTY’S NEW ANTI-MONEY LAUNDERING REGIME
Author: Clare Burnett
The Urban Developer
After a decade of delay, Australia has closed the loophole in its anti-money laundering rules that left real estate exempt, despite it being one of the country's biggest channels for concealing illicit funds.
developers need to be compliant under the new regulations. Holding Redlich special counsel David Chambers says that the immediate priority for the property sector is compliance with the reforms. Reporting entities that provide a designated service must enrol with AUSTRAC within 28 days of first providing that service.
Anti-money laundering regulator the Australian Transaction Reports and Analysis Centre (AUSTRAC) estimated that in 2020, Chinese interests alone laundered more than $1 billion through Australian real estate. In a 2022 inquiry, the Australian Federal Police revealed that of the $187 million in assets it seized in the 2021 financial year, $116 million was real estate. As a result of these high-profile pushes against money laundering in property, AUSTRAC introduced major changes in July bringing the property sector in line with Tranche 1 entities such as banks, gambling providers and other financial institutions, all of which have been under the regime since 2006. But a little more than a week after the regime change’s first obligatory deadline by which developers needed to enrol with AUSTRAC and start implementing new systems and controls, the industry is still getting its head around the changes. Money-laundering rule changes for developers Under the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act, initially passed in 2024 and dubbed AML/CTF, developers are now considered Tranche 2 entities. Specific activities including brokering the sale, purchase or transfer of a real estate deal or directly selling real estate without the involvement of a real estate agent are two of the major activities or “designated services” with which
Significant penalties can be imposed by way of AUSTRAC infringement notices of Federal Court penalty orders, Chambers says. “Reporting entities should already have undertaken a risk assessment, implemented a written AML/CTF program, established appropriate governance arrangements, allocated AML/CTF responsibilities, delivered staff Holding Redlich special counsel David Chambers: Significant penalties can be imposed.
16 – August / September 2026
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