For years, anti-money laundering obligations have largely applied to banks and financial institutions. Since 1 July 2026, that has changed.
Australia's anti-money laundering and counter-terrorism financing (AML/CTF) regime has expanded to capture a range of new professions and services, including lawyers, conveyancers, accountants and real estate professionals. The reforms, commonly referred to as the "Tranche 2" reforms, are designed to strengthen Australia's ability to detect and prevent money laundering, terrorism financing and other financial crimes.
If you are buying or selling property or a business, setting up a company or trust, or arranging certain business finance, you will now be asked for more information about your identity, ownership arrangements and the transaction. Understanding what is required will help avoid delays.
What is AML/CTF?
Money laundering is the process of making illegally obtained funds appear legitimate.
Property transactions and business acquisitions are often attractive vehicles for money laundering because they frequently involve significant sums of money, complex ownership structures and multiple parties. The purpose of Australia's AML/CTF regime is to reduce these risks by requiring certain businesses to identify their customers, understand who ultimately owns or controls the parties to the transaction and, where necessary, report suspicious activity.
For clients, the main change is that checks similar to those you may already encounter when dealing with a bank now apply to certain services provided by your lawyer and other advisers.
When Will the New Requirements Apply?
The requirements do not apply every time you seek legal advice. They apply to particular services, called ‘designated services’, such as helping you carry out a property or business transaction or establish a company or trust.
General advice about your legal rights or options is not, by itself, a designated service. However, work that directly advances a relevant transaction, such as preparing transaction documents or arranging settlement, can be covered.
For example, asking us to explain the legal implications of buying a property is different from engaging us to prepare the contract or handle the transfer and settlement. The latter work will generally trigger the new checks.
The same principle applies across commercial transactions generally. Advising on a proposed business sale is one thing. Acting to implement that sale is another.
Real Estate Transactions and Long-Term Leases
If you are buying, selling or transferring a home, investment property, farm or commercial property, the legal work involved will generally be covered by the reforms.
The rules are not limited to outright ownership of land. Certain long-term leases and other ownership-like interests can also be covered.
If your transaction involves a Crown lease, pastoral lease or another leasehold interest, we can confirm if the particular interest and work involved falls within the rules.
The 30-Year Lease Threshold
The treatment of leases will be particularly relevant in sectors such as agricultural, pastoral, commercial, infrastructure and renewable energy projects, where long-term land access arrangements are common.
A leasehold interest is treated as real estate where its fixed term exceeds 30 years. Options for renewal, extension rights and further terms are not counted towards that threshold.
For example, a 35-year lease constitutes real estate for the purposes of the legislation. By contrast, a 25-year lease with a further 25-year option to renew does not fall within the definition because the original lease term does not exceed 30 years.
A shorter lease does not automatically mean the whole matter falls outside the reforms. Other work, such as handling transaction funds or assisting with a related business purchase, may still be covered.
What Property Work is Captured?
For clients, the checks will generally form part of the conveyancing process, including preparing transaction documents, arranging a transfer and coordinating settlement.
It is important to allow time for any required checks before transaction work begins, rather than leaving them until settlement is approaching.
Business Transactions, Companies and Trusts
Business owners and investors may also encounter the new requirements when buying or selling a business or company, setting up or restructuring a company or trust, or arranging finance for a company or trust.
Where we act for a client in a covered transaction, we may need to identify not only the client but also the individuals who ultimately own or control the company or trust involved.
This means you may be asked for company records, a trust deed or details of the people behind the structure, even where you have dealt with us before.
Trust Accounts and Client Funds
The reforms can also apply where we receive, hold or transfer money or other property for you as part of planning or carrying out a transaction.
For example, if our trust account is being used for settlement funds or to hold money pending completion, we may need information about where the money came from and who is providing it.
Does This Apply to Every Legal Matter?
Although the reforms are broad, they do not apply to every area of legal practice.
General legal advice, litigation and dispute resolution, and preparing a will, will generally fall outside the new requirements. However, related work may still be covered if it involves a designated service, such as establishing a company or trust or handling funds for a separate transaction.
We will consider the work you need and explain whether any additional checks are required.
What Will Clients Notice?
For most affected clients, the main practical change is being asked for more information at the beginning of a matter. Depending on the client and transaction, this may include:
- identification documents, such as a current driver’s licence or passport;
- company or trust documents and details of the people who ultimately own or control the structure;
- information about the purpose of the transaction and anyone acting on your behalf; and
- where required, an explanation and supporting documents showing where transaction funds came from, such as savings, a loan or sale proceeds.
These are routine legal requirements, not an indication that you are suspected of wrongdoing. The extent of the checks will depend on the circumstances. Existing clients may also be asked to update information, although transitional arrangements apply to some existing relationships.
Providing this information promptly will help avoid delays. If required checks cannot be completed, we may need to delay starting or progressing the relevant work.
How Can Clients Prepare?
Let us know about a proposed transaction early, keep current identification and relevant company or trust documents readily available, and respond promptly to requests for information. If someone else is providing the funds, or your ownership structure is complex, tell us at the outset so we can explain what is needed.
Being a client of a regulated professional does not, by itself, mean you must register with AUSTRAC. However, if your own business provides services covered by the reforms, it may have separate compliance obligations.
How Can We Help?
At Mellor Olsson, our property and commercial teams regularly advise clients on property acquisitions and disposals, leasing arrangements, business sales and acquisitions, financing transactions and a broad range of commercial matters.
We can explain whether the new requirements apply to your matter, what information you need to provide and when the checks should be completed, so you can plan ahead and minimise disruption to your transaction.
If you would like further information regarding the reforms or how they affect your circumstances, please contact James McEwen directly, email us at [email protected] or call (08) 8414 3400.