Property management services are excluded from AML/CTF designated services under Australia's Tranche 2 reforms. You do not need to conduct CDD on landlords or tenants, and routine rental trust account activities do not trigger AML/CTF obligations. But if your agency also conducts sales - which describes most full-service residential agencies - the sales side makes you a reporting entity from 1 July 2026. Your AML/CTF program must cover every sales transaction, while your property management activities remain outside the framework.
Why the Distinction Exists
Australia's AML/CTF framework regulates services, not industries. The legislation does not regulate "real estate agencies" as a category. Instead, it identifies specific designated services that trigger AML/CTF obligations. Those designated services are defined around the transfer of ownership of real estate - the buying and selling of property - not the ongoing management of tenanted properties.
This distinction is deliberate. The money laundering and terrorism financing risks that Tranche 2 reforms target are concentrated at the point where ownership changes hands. That is where illicit funds enter the property market, where beneficial ownership can be obscured, and where the proceeds of crime can be integrated into legitimate wealth. Property management - collecting rent, maintaining premises, managing tenancies - does not present the same profile of risk.
The designated services that bring real estate professionals into the AML/CTF framework are defined in section 6(5A) of the AML/CTF Act 2006 as amended by the Tranche 2 reforms. They are:
- Brokering the sale of real estate - acting as an intermediary in the sale, purchase, or transfer of real estate, including residential, commercial, and rural property.
- Brokering the purchase of real estate - acting on behalf of a buyer to identify, negotiate, and secure the purchase of real estate, including buyer's agent services.
Property management, residential leasing, commercial leasing, rent collection, tenancy management, and maintenance coordination are not designated services. They fall outside the scope of the AML/CTF Act entirely, unless the transaction involves a leasehold interest of more than 30 years, which AUSTRAC's definition of real estate may capture.
What Is Covered and What Is Not
Auctioneers who conduct property auctions are providing a designated service - brokering the sale of real estate. If your agency conducts auctions, those activities fall squarely within the AML/CTF framework regardless of whether you also manage rental properties. The auction itself is a sale transaction, and the auctioneer is acting as an intermediary in the transfer of ownership.
Scenarios: Drawing the Line in Practice
Pure Property Management Agency
Your agency exclusively manages rental properties. You sign tenants, collect rent, coordinate maintenance, and manage landlord relationships. You do not list properties for sale, conduct auctions, or broker any purchase or sale transactions.
You are not providing a designated service. You have no AML/CTF obligations. You do not need to enrol with AUSTRAC, develop an AML/CTF program, or conduct CDD on any landlord or tenant.
No AML/CTF obligationsCommercial Leasing Agency
Your agency specialises in commercial leasing - negotiating and managing leases for office, retail, and industrial premises. You do not broker the sale or purchase of commercial property. Your lease terms are standard commercial terms, typically between one and ten years.
Standard commercial leasing is not a designated service. However, be aware that AUSTRAC's definition of real estate includes leasehold interests of more than 30 years. If you negotiate unusually long-term leasehold arrangements, those transactions could potentially fall within the framework.
No AML/CTF obligations for standard leasingFull-Service Agency - Sales and Property Management
Your agency operates both a sales division and a property management division. Your sales team lists and sells properties. Your property management team manages a rental roll of tenanted properties. This describes the majority of full-service residential agencies in Australia.
Your sales activities are designated services. You are a reporting entity. You must enrol with AUSTRAC, develop an AML/CTF program, and comply with all obligations for every sales transaction. Your property management activities remain outside the framework - but the existence of the sales division means your agency is regulated.
Full AML/CTF compliance required for salesProperty Manager Who Assists Landlord to Sell
You primarily manage rental properties, but occasionally a landlord asks you to help them sell. You refer the landlord to a sales agent in your network, or you handle the sale yourself under your real estate licence.
If you refer the sale to another agent and receive only a referral fee, you may not be providing a designated service yourself - but this depends on the nature of the referral arrangement and whether you are acting as an intermediary. If you handle the sale directly, you are providing a designated service and become a reporting entity. The obligation attaches to the service, not to how frequently you provide it.
Depends on the nature of your involvementStrata Manager
You manage strata schemes - maintaining common property, administering levies, coordinating building maintenance, and managing owners' corporation meetings. You do not broker the sale or purchase of individual lots within the scheme.
Strata management is not a designated service. You are not acting as an intermediary in the sale or purchase of real estate. Even though your work relates to real property, the nature of the service is administrative management, not transactional brokerage.
No AML/CTF obligationsWhat Mixed Agencies Need to Understand
Most full-service residential agencies in Australia operate both a sales division and a property management division. If your agency conducts any sales activity - even a small number of transactions per year - the sales side makes you a reporting entity with full AML/CTF obligations. Your AML/CTF program must clearly delineate which activities are covered and which are not.
Required for Sales Activities
- AUSTRAC enrolment as a reporting entity
- ML/TF risk assessment covering sales operations
- AML/CTF program (Part A and Part B)
- CDD on vendors before listing
- CDD on buyers (delayed CDD permitted)
- Ongoing customer due diligence throughout the transaction
- Suspicious matter reporting to AUSTRAC
- Record keeping for seven years
- Staff training on AML/CTF obligations
- Appointment of an AML/CTF compliance officer
- Independent review by 2029
Not Required for Property Management
- No CDD on landlords or tenants
- No AML/CTF program for PM activities
- No suspicious matter reporting for rental activities
- No AUSTRAC reporting for rent collection
- No record-keeping obligations under the AML/CTF Act
- No staff training requirements under the AML/CTF Act
- No independent review of PM operations
- No beneficial ownership identification for landlords
- No PEP or sanctions screening for tenants
- No source-of-funds inquiries for rental payments
The most common mistake mixed agencies make is over-scoping their AML/CTF program to include property management activities. This creates unnecessary compliance burden, confuses staff, and can actually undermine your sales compliance by diluting focus. Your AML/CTF program should explicitly state that property management activities are excluded from the scope of the program and that CDD, reporting, and record-keeping obligations apply only to sales transactions. Get the boundary right from the start.
What Your Risk Assessment Should Say
If your agency operates across both sales and property management, your ML/TF risk assessment must clearly address the scope of your regulated activities. Specifically, it should:
- Define which services are designated services - identify the specific sales activities your agency provides that constitute brokering the sale or purchase of real estate.
- Exclude property management explicitly - state clearly that property management, residential leasing, rent collection, and tenancy management are not designated services and are excluded from the scope of the AML/CTF program.
- Address the risk of scope creep - identify the risk that property management staff may inadvertently become involved in sales activities (for example, assisting a landlord to sell) without triggering the appropriate AML/CTF procedures.
- Document internal controls - describe the procedures your agency uses to ensure that sales transactions are identified and routed through the AML/CTF program, and that property management activities are not inadvertently captured.
A risk assessment that does not address the boundary between your regulated and unregulated activities is incomplete. AUSTRAC expects your risk assessment to reflect your actual business operations, and for a mixed agency, the sales-PM boundary is one of the most important operational features to document.
What This Means for PM-Only Businesses
If your business exclusively provides property management services and you do not broker any sales or purchase transactions, you are not a reporting entity under the AML/CTF framework. You have no obligation to enrol with AUSTRAC, develop an AML/CTF program, conduct CDD on landlords or tenants, report suspicious matters, or undergo an independent review.
This does not mean you have no regulatory obligations at all. You remain subject to state and territory real estate licensing requirements, trust account regulations, consumer protection laws, and privacy obligations. But none of those are AML/CTF obligations, and they should not be confused with them.
If your business model changes in the future - for example, if you begin offering sales services, or if a landlord asks you to sell a property and you agree - you would need to reassess your position. A single sale brokered in the course of carrying on your business is sufficient to trigger AML/CTF obligations for that transaction.
If you only manage rental properties and never broker a sale, you are not caught by the AML/CTF regime. If you also sell, you are. It is that straightforward.
Mixed Agency? We Help You Get the Boundary Right.
GateCrown builds AML/CTF programs for Australian real estate agencies that operate across both sales and property management - with risk assessments that correctly scope to your regulated activities, CDD procedures calibrated to your sales client base, and program documentation that is ready for your first AUSTRAC independent evaluation.
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