A designated service is a specific activity listed in the AML/CTF Act that, when provided with a geographical link to Australia in the course of carrying on a business, triggers your AML/CTF obligations. For real estate, there are two: brokering the sale, purchase or transfer of real estate on behalf of another person (covering seller's agents, buyer's agents, and dual agents), and selling or transferring real estate directly without an independent agent (covering property developers). Everything else - property management, leasing, valuation, advisory - is outside the designated service framework.
The AML/CTF compliance obligation for Australian real estate professionals turns on a single threshold question: whether your business provides a designated service. If your business provides at least one designated service with a geographical link to Australia, it becomes a reporting entity and AML/CTF obligations apply to that regulated activity. Everything - enrolment, your AML/CTF program, CDD, suspicious matter reporting, record-keeping - applies to the designated service your business provides. A mixed business can have regulated and unregulated activities running side by side; the obligations attach to the designated service, not necessarily to every activity the business conducts.
AUSTRAC's framework is service-specific, not industry-specific. It does not regulate "real estate agents" as a profession. It regulates a defined set of services that real estate professionals commonly provide, because those services have been identified as posing a risk for money laundering and terrorism financing. Two real estate businesses operating side by side could have completely different obligations depending on what they actually do.
This guide explains the designated service concept from the ground up - what the definition requires, how each element works in practice, the exact types of property interests that are covered, and the real-world scenarios where the boundary is and isn't obvious.
The Formula: Three Elements That Must All Be Present
AUSTRAC's glossary defines a designated service as a service that is listed in section 6 of the AML/CTF Act and that has a geographical link to Australia. For real estate, the definition also requires the service to be provided in the course of carrying on a business. All three elements must be satisfied for an obligation to arise.
(Table 5 of the Act)
to Australia
carrying on a business
→ AML/CTF obligations
If any one of these three elements is absent, the activity in question is not a designated service and AML/CTF obligations do not arise for that specific activity. Each element has specific meaning under the Act and AUSTRAC's guidance - and each has edge cases that matter in practice.
The Two Real Estate Designated Services
The AML/CTF Act contains two designated services specifically relating to real estate. Both are in Table 5 of section 6 of the Act. These two services cover almost everyone who buys and sells property professionally - but they do not cover property management, leasing, valuation, or advisory services.
Table 5 - Item 1
This is the core designated service for real estate agents and buyer's agents. You are providing this service when you act as an intermediary or agent for another person - negotiating on their behalf, seeking out a party for them to transact with, or otherwise brokering the sale, purchase or transfer of real estate in the course of carrying on a business.
The designated service does not require a sale for consideration. Brokering the transfer of property as a gift - for example, assisting a parent transfer ownership to a child - is also a designated service.
Table 5 - Item 2
This is the designated service for property developers who sell directly to buyers without using an independent real estate agent to broker the transaction. If a developer sells house-and-land packages, off-the-plan apartments, or land in new subdivisions directly to buyers, this designated service applies.
A private individual selling their own home is not providing this service - the test is whether the sale is carried out as part of a business of selling real estate. Incidental sales of property by a business (such as a company selling its own office premises) are also excluded on this basis.
Lawyers and conveyancers are different. A lawyer or conveyancer who assists with the planning or execution of a property sale or transfer may be regulated under Table 6 of the Act - the professional services designated services - rather than Table 5. The Table 6 regime uses different language ("assisting in the planning or execution" rather than "brokering") and has its own guidance. If your business involves legal or conveyancing work alongside real estate agency services, the two tables may both be relevant.
Unpacking Each Element of the Definition
AUSTRAC defines a broker as a person who acts as an intermediary or agent for another person for consideration. A common indicator is that your services include negotiating on behalf of the person you represent, or seeking to find a person for them to transact with, in return for a commission.
You do not need to be called a "broker" to be providing a brokering service. What matters is the function - are you acting as an intermediary between parties to a property transaction?
The designated service covers all three types of dealing: sales for money, purchases on behalf of buyers, and transfers - whether or not consideration is involved. A transfer of real estate for no payment (e.g. a family property transfer) is still within the definition.
The Act's definition of real estate covers ownership interests in Australian land and certain ownership-like interests. It also covers equivalent interests in foreign land where the designated service has a geographical link to Australia. See the section below for the full breakdown of included and excluded interests.
The service must be connected to carrying on a business. AUSTRAC adopts a broad interpretation: a service can be captured even if provided on a one-off basis, infrequently, or at a low volume, provided it is connected to the conduct of a business.
What this excludes is the truly private, non-commercial context - an individual selling their own home as a private seller, or a business making an incidental sale of property it owns. In those cases, the activity is not carried out as part of a business of selling real estate.
The service must have a geographical link to Australia. AUSTRAC's definition: the service is provided to the customer at or through a permanent establishment of the entity in Australia; or the entity is an Australian resident and the service is provided through a foreign branch; or the entity is a subsidiary of an Australian-resident company providing the service through a foreign establishment.
Practically: if you are an Australian real estate agency operating in Australia, your services have a geographical link to Australia. You do not need to analyse this further. The geographical link question becomes relevant for offshore or cross-border structures.
Item 1 (brokering) requires you to act on behalf of another person - the buyer, seller, transferee or transferor. This is what distinguishes an agent from a principal. A property developer selling their own stock is not acting on behalf of another person - which is why Item 2 exists as a separate designated service to capture that scenario.
What Counts as "Real Estate": The Included and Excluded Interests
The AML/CTF Act's definition of "real estate" is precise. It covers specific ownership interests in land - not all interests, and not all dealings with property. Getting the definition right matters particularly for businesses that deal in less conventional property structures.
Included
Fee simple interest - the standard form of full land ownership in Australia. Most residential and commercial property purchases involve a fee simple interest. This is the core of what the designated service captures.
Included
Leasehold interests of more than 30 years - leaseholds with terms exceeding 30 years (excluding options for further terms) are treated as ownership-like and are within the definition. This is the threshold that distinguishes ownership-like from tenancy-like.
Included
Land use entitlements - an entitlement to occupy land conferred through ownership of shares in a company, units in a unit trust scheme, or a combination of shareholding/unit ownership together with a lease or licence. Company title properties and similar structures fall within this category.
Included
Residential site agreements (leases > 30 years) - where a homeowner leases residential land (e.g. in certain retirement villages or residential parks) under a leasehold of more than 30 years, the interest qualifies as real estate.
Included
Equivalent interests in foreign land - interests in land in a foreign country that are equivalent to any of the above, or that otherwise confer ownership rights. The property can be overseas - the obligation test is whether the designated service has a geographical link to Australia, not where the property is located.
Excluded
Leaseholds of 30 years or less - short to medium-term leases (the vast majority of residential and commercial tenancies) are not within the definition of real estate. Managing, negotiating, or facilitating these leases is not a designated service.
Excluded
Dwellings not attached to land - dwellings on residential sites where the resident owns the dwelling but leases the land on which it sits (such as caravans or some retirement village units) are excluded. The dwelling is treated as a chattel, not real estate.
Excluded
Granting (not transferring) a residential site leasehold - granting or re-granting a leasehold interest under a residential site agreement generally does not qualify as transferring that interest, because the interest only comes into existence when granted and is not transferred between people.
When Does the Designated Service Actually Start?
Knowing when you start providing the designated service matters because initial CDD on your client must be completed before you start. AUSTRAC's guidance provides specific commencement triggers depending on your role in the transaction.
| Your role | Party | When the designated service starts |
|---|---|---|
| Seller's agent | Seller / transferor | When an agreement to broker the sale or transfer of the property is signed (the listing agreement) |
| Seller's agent | Buyer / transferee | When it is reasonably expected that the transaction will proceed - typically when the buyer's offer has been accepted and the contract of sale is signed |
| Buyer's agent | Buyer / transferee | When an agreement to find or identify a property is signed (the buyer engagement agreement) - this is before you start searching |
| Buyer's agent | Seller / transferor | When it is reasonably expected that the transaction will proceed - typically when the buyer's offer is accepted and the contract is signed |
| Property developer (Item 2) | Buyer | When there is a commitment to sell or transfer the property - typically when an agreement to sell or transfer is entered into |
| Any seller's agent - auction | Buyer | At the fall of the hammer at auction. Delayed CDD is permitted in this scenario where completing initial CDD before the auction is not practicable given the short time between auction and contract signing. |
Practical Scenarios: Is This a Designated Service?
This is a designated service (Table 5, Item 1). The agent is brokering the sale of real estate on behalf of a seller, in the course of carrying on a business, with a geographical link to Australia. The agent's customer is both the vendor (from the listing agreement) and the buyer (from when the offer is accepted). CDD is required on both parties - on the vendor before the listing starts and on the buyer when the transaction is reasonably expected to proceed.
Yes - designated serviceNot a designated service. Property management and residential tenancy management do not involve brokering the sale, purchase or transfer of real estate. No ownership changes hands. AUSTRAC has confirmed that property management services are excluded from the AML/CTF designated services. This business is not a reporting entity.
No - not a designated serviceThis is a designated service (Table 5, Item 2). The developer is selling real estate in the course of carrying on a business of selling real estate, and the sales are not brokered by an independent real estate agent. The developer is the reporting entity and has CDD obligations on the buyers. The designated service starts when there is a commitment to sell - typically when an agreement to sell is entered into.
Yes - designated serviceNot a designated service. The leases being negotiated are well under 30 years - they are not ownership-like interests and fall outside the definition of "real estate" for these purposes. Commercial leasing activity of this kind is excluded from the designated service framework. This business is not a reporting entity for its leasing activities.
No - not a designated serviceThis is a genuinely borderline situation. AUSTRAC's definition of a broker requires acting as intermediary "for consideration." If no commission or other form of consideration is received, the "broker" element may not be met. However, AUSTRAC also notes that free or low-volume services connected to carrying on a business can still be captured. An informal, one-off favour with no fee, entirely separate from the agent's business activities, is the most likely scenario to fall outside the definition - but any agent doing this should be aware of the ambiguity and seek independent advice about their specific circumstances.
Borderline - depends on the specific factsPotentially a designated service - depends on the structure. The "real estate" definition includes equivalent interests in foreign land, and the geographical link test is met if the service is provided through an Australian permanent establishment or the entity is an Australian resident. If the Australian buyer's agency is brokering the purchase on behalf of the buyer from Australia, and the agency is an Australian resident operating from an Australian office, the geographical link is likely satisfied. The property can be overseas - it is the service that must have the link to Australia, not the property.
Likely yes if the agency is Australian-based - seek advice on specific structureThis is a designated service. AUSTRAC's guidance explicitly states that brokering the transfer of property without consideration is sufficient - there does not need to be a sale price. A family transfer of real estate assisted by an agent in the course of their business falls within the brokering designated service. The agent has CDD obligations on both the transferor (parent) and the transferee (child).
Yes - a transfer without consideration is still a designated serviceWhat Is Definitely Not a Designated Service
AUSTRAC's guidance sets out a number of activities that are not designated services, even when they are carried out by real estate professionals in the context of property transactions:
- General or hypothetical advice - discussing the pros and cons of buying or owning property without brokering a specific transaction is not a designated service.
- Simple referrals to third parties - referring a client to another agent, a lawyer, or a lender without taking on a brokering role in the transaction is not a designated service.
- Property management and tenancy administration - managing an ongoing tenancy, collecting rent, processing lease renewals, and administering rental trust accounts are not designated services.
- Most commercial and residential leasing - negotiating or managing leases under 30 years is not a designated service. Property management and commercial leasing are not included in the new AML/CTF obligations.
- Court-ordered transfers - some court-ordered transfer scenarios may fall outside the designated service framework depending on the role being performed and the legal basis for the transfer. Businesses should assess those cases carefully rather than assume they are always regulated or always excluded; AUSTRAC's professional services guidance addresses this in the context of conveyancers, and the same careful analysis applies to real estate agency activity in court-ordered scenarios.
- Auctioneering - whether auctioneering is a designated service depends on what the person is actually doing in the transaction. AUSTRAC's reform checker notes that selling or transferring real estate without an independent agent is a practice that can include auctioneers as well as property developers. Where an auctioneer is only conducting the auction and is not also acting in a brokering or direct-sale capacity, the activity may not constitute a designated service - but this is fact-specific. Where the auctioneer is also the selling agent, the selling agency designated service covers the transaction as a whole.
- Incidental property sales - an individual or business that owns and sells its own premises is not carrying out a business of selling real estate, so that sale is not a designated service.
Why Getting the Definition Right Matters Before 1 July 2026
The designated service analysis is the first thing any real estate business should complete before 1 July 2026. It is the threshold question that determines whether every other compliance obligation applies. Getting it wrong in either direction has real consequences.
If you incorrectly conclude that you do not provide a designated service when you do - and you therefore do not enrol with AUSTRAC, build an AML/CTF program, or conduct CDD - you will be in breach of the Act from the first transaction you conduct after 1 July 2026. Failure to enrol when required is a direct contravention.
If you incorrectly conclude that you do provide a designated service when you don't - and you spend significant time and money building compliance infrastructure that is not legally required - the cost is wasted resources, not legal exposure. But this outcome is also avoidable with a correct analysis upfront.
AUSTRAC's self-check tool: AUSTRAC has published an online tool at austrac.gov.au that allows businesses to check whether they may be regulated by answering questions about the services they provide. For most real estate agents conducting sales, the answer will be clear. For businesses with more complex service lines - mixed agencies, businesses that occasionally assist with property transactions as a secondary activity, or businesses with offshore components - a careful analysis against the definition, and independent legal advice where warranted, is recommended before 1 July 2026.
Not Sure If Your Business Is a Reporting Entity?
GateCrown helps Australian real estate businesses work through the designated service analysis, determine their reporting entity status, and - where AML/CTF obligations apply - build a complete, operational AML/CTF program before 1 July 2026.
Talk to a Compliance Specialist →Frequently Asked Questions
What is a designated service in real estate?
A designated service is a specific activity listed in the AML/CTF Act that triggers compliance obligations. For real estate, there are two: brokering the sale, purchase or transfer of real estate on behalf of another person, and selling real estate directly without an independent agent. The service must have a geographical link to Australia and be provided in the course of carrying on a business.
Does property management count as a designated service?
No. Property management, residential leasing, and most commercial leasing are not designated services. Only the brokering of the sale, purchase, or transfer of real estate triggers AML/CTF obligations.
When does the designated service start for a seller's agent?
When an agreement to broker the sale or transfer is signed with the vendor. CDD on the vendor must be completed before or at this point.
Are property developers reporting entities?
Yes, if they sell real estate directly to buyers without an independent agent, in the course of carrying on a business of selling real estate. This is covered by Table 5, Item 2 of the AML/CTF Act.
Does brokering a property transfer as a gift count?
Yes. The designated service covers transfers without consideration. A family property transfer assisted by an agent in the course of their business is a designated service, and CDD is required on both parties.