AML/CTF for Conveyancers: What Tranche 2 Means for Your Practice

9 min read · General information, not legal advice · Updated 2026-06-12

If you run a conveyancing or settlement practice in Australia, you are about to become a regulated business in a way you have never been before. From 1 July 2026, Tranche 2 of the AML/CTF reforms extends Australia's anti-money laundering regime to professional service providers, including conveyancers, when they provide certain 'designated services'. The decision in front of you now is not whether to comply, but how to get ready in time without disrupting settlements or scaring off clients.

This article is written for the principal or sole practitioner who handles property transfers day to day and needs a plain-English answer to one question: what do I actually have to do? We will cover what Tranche 2 is, exactly when conveyancing work crosses into 'designated service' territory, the obligations that follow, the mistakes that catch firms out, and a step-by-step readiness plan you can start this quarter. This is general information, not legal advice, and your precise obligations depend on the designated services you provide.

What Tranche 2 actually is

Tranche 2 refers to reforms introduced by the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2024. It extends Australia's existing AML/CTF regime, which has long applied to banks, casinos and remittance providers, to a set of new sectors known as 'tranche 2 entities'.

For conveyancers, the headline date is 1 July 2026, when the new obligations are due to commence. The regulator is AUSTRAC (the Australian Transaction Reports and Analysis Centre). AUSTRAC is where you enrol, where you lodge reports, and whose rules you will need to follow. Enrolment and reporting both happen through AUSTRAC Online.

The reform exists because property and professional services are well-understood channels for moving and disguising illicit funds. Conveyancers sit at the point where money, identity and real estate meet, which is exactly why the regime now reaches your desk.

Who and what it applies to: the designated services trap

Here is the part that trips people up. The regime does not regulate 'conveyancers' as a profession in the abstract. It regulates designated services. You become a reporting entity only when, and to the extent that, you provide one of those specified services.

The Tranche 2 sectors include:

• Real estate professionals
• Dealers in precious metals and precious stones
• Certain professional service providers, including lawyers, conveyancers, accountants, and trust and company service providers, when they provide specified designated services

For a conveyancing practice, the activities most likely to fall in scope are the core ones you already do every day: assisting a client to buy, sell or transfer real estate, and the related handling of transactions on their behalf. The practical effect is that most conveyancing firms should plan as though they will be in scope, then confirm the detail against AUSTRAC's published guidance as the rules are finalised.

Do not assume you are out of scope because you are small, because you only act locally, or because you never touch cash. Scope is driven by the nature of the service you provide, not the size of your firm.

The core obligations you will carry

Once a service you provide is a designated service, a familiar set of obligations attaches. These are the same building blocks every reporting entity in Australia already works with:

• Enrol with AUSTRAC via AUSTRAC Online so the regulator knows you are operating.
• Develop and maintain an AML/CTF program — your governance arrangements, a documented money laundering and terrorism financing (ML/TF) risk assessment, and the policies, procedures, systems and controls that flow from it.
• Conduct customer due diligence (CDD/KYC) — verify who your client really is before you provide the service, and carry out ongoing CDD and transaction monitoring through the life of the matter.
• Report to AUSTRAC — lodge suspicious matter reports (SMRs) when something does not add up, and threshold transaction reports (TTRs) for physical currency of AUD 10,000 or more.
• Keep records — retain the relevant records, generally for seven years.
• Appoint an AML/CTF compliance officer (AMLCO) — a named person accountable for the program.

Failure to meet these obligations can attract significant civil and criminal penalties, so this is a genuine compliance function, not a box-ticking exercise.

A step-by-step readiness plan

You do not have to do everything at once, but you do have to start. Work through these steps in order so each one builds on the last:

• Confirm your scope. Map every service line in your practice and identify which ones are likely to be designated services. Check this against AUSTRAC guidance as the rules are finalised.
• Appoint your AMLCO. Decide who in your firm will own AML/CTF. In a small practice this is often the principal; document the appointment either way.
• Run your ML/TF risk assessment. Assess your exposure across customer types, the services you provide, delivery channels and geography. This assessment is the foundation everything else sits on.
• Build your AML/CTF program. Turn the risk assessment into written policies, procedures, systems and controls, including how you verify clients, monitor matters and escalate concerns.
• Stand up your CDD process. Decide how you will collect and verify identity, what you do for higher-risk clients, and how you keep customer information current.
• Prepare your reporting workflow. Know how and when you would lodge an SMR or a TTR, and who is responsible for doing it.
• Set up record-keeping. Make sure your file structure retains the right records for the required period, generally seven years.
• Train your team. Everyone who handles clients or files needs to recognise red flags and know the escalation path.
• Enrol with AUSTRAC. Complete enrolment through AUSTRAC Online ahead of the 1 July 2026 commencement.

Common mistakes conveyancers make

The firms that struggle tend to make the same avoidable errors. Watch for these:

• Treating it as a one-off project. An AML/CTF program is a living system. Your risk assessment and procedures need to be reviewed and kept current, not written once and filed away.
• Confusing CDD with the identity checks you already do. Verifying a client for a property transfer is not the same as risk-based AML customer due diligence with ongoing monitoring. They overlap, but they are not interchangeable.
• Assuming 'no cash' means 'no obligations'. TTRs are only one trigger. SMRs, CDD, record-keeping and the program apply regardless of whether you ever handle physical currency.
• Tipping off a client. If you lodge or are considering an SMR, you must not disclose that to the client. Build this discipline into your team's training early.
• Leaving enrolment to the last week. Enrolment and program build take time. Starting late risks operating without the controls in place when commencement arrives.
• Copying a generic program off the internet. A program that does not reflect your firm's actual risk profile is not a compliant program.

Where a template kit saves time

Most of the readiness work above is documentation: a risk assessment, an AML/CTF program, CDD procedures, reporting workflows, an AMLCO appointment and staff training records. Building these from a blank page is slow, and it is easy to leave gaps.

An audit-ready template kit gives you a structured starting point for each document, so your time goes into tailoring the controls to your practice rather than designing the framework from scratch. The key is that any template must be customised to your firm's real risk profile and the designated services you actually provide. A kit accelerates the drafting; it does not replace the thinking. Used well, it can take a multi-week scramble down to a focused exercise of adapting proven structures to how your practice really works.

What to do between now and 1 July 2026

With commencement set for 1 July 2026, you have a finite window to move from 'aware' to 'ready'. The sensible sequence is: confirm scope now, appoint your AMLCO, complete your risk assessment, then build the program and CDD process around it, leaving enrolment and final training as the last steps before go-live.

As the AUSTRAC rules are finalised, expect more detailed guidance on exactly which conveyancing activities are designated services and how the obligations apply in practice. Keep an eye on AUSTRAC's published material and revisit your scope assessment when it lands. Treat the months ahead as build time, not wait-and-see time.

Remember: this is general information, not legal advice, and your obligations depend on the specific designated services you provide. Where the application to your practice is unclear, confirm it with AUSTRAC or a qualified adviser before you rely on it.