Australia’s New Anti-Money Laundering Laws: What Clients Need to Know Before 1 July 2026

‍From 1 July 2026, Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws will expand significantly. For the first time, many legal, accounting, conveyancing and property-related services will fall within the scope of the AML/CTF regime administered by AUSTRAC.  

For clients, this means that transactions which may have previously been straightforward – such as buying property, establishing companies or trusts, or transferring funds through a law firm trust account – will now involve additional identification and verification requirements. 

While these changes may introduce some extra steps, they are designed to strengthen the integrity of Australia’s financial and legal systems and bring Australia into line with international standards.

What are the “Tranche 2” AML reforms?

Australia has had AML/CTF laws for many years, but until now they have largely applied to banks, financial institutions, casinos and remittance providers. The reforms commencing on 1 July 2026, often referred to as the “Tranche 2 reforms”, extend these obligations to a broader range of professional service providers, including:

•             lawyers and law firms

•             conveyancers

•             accountants

•             real estate professionals

•             trust and company service providers

•             dealers in precious metals and stones.

Importantly, the laws do not regulate every service provided by these professions. Instead, they apply when a business provides certain “designated services”, particularly services involving property transactions, company structures, trusts, or the movement of funds.

Why are these changes being introduced?

Governments and regulators globally have become increasingly focused on preventing criminal organisations from using legitimate businesses and professional advisers to move or conceal illicit funds.

Property transactions, corporate structures and trust arrangements can sometimes be exploited for money laundering or terrorism financing purposes. Australia has faced ongoing international pressure to strengthen oversight in these areas.

The reforms are intended to:

•             improve transparency in financial and property transactions

•             reduce opportunities for organised crime

•             align Australia with international AML standards

•             strengthen protections for businesses and consumers.

How will clients be affected?

For most clients, the impact will be procedural rather than substantive. However, you should expect that your lawyer or adviser may ask for more information and documentation than in the past.

You may be asked to provide:

•             proof of identity documents

•             information about the source of funds used in a transaction

•             details regarding ownership structures, trusts or companies

•             information about beneficial owners or controllers of entities

•             supporting documents for significant transactions or transfers.

For example, if you are purchasing property, establishing a trust, transferring business interests, or depositing funds into a law firm trust account, your lawyer may need to verify where the funds originated and who ultimately controls the transaction.

These processes are similar to the “Know Your Customer” (KYC) checks already commonly undertaken by banks and financial institutions.

Will transactions take longer?

Potentially, yes.

Because firms will be required to complete identification and verification processes before proceeding with certain transactions, delays can occur where information is incomplete, or documentation is not readily available.

Clients can help minimise delays by:

•             responding promptly to requests for information

•             providing certified identification where requested

•             ensuring company and trust records are up to date

•             being prepared to explain the source of transaction funds where necessary.

What obligations do law firms have under the new laws?

Law firms that provide designated services will need to implement comprehensive AML/CTF compliance programs. These obligations may include:

•             conducting client due diligence

•             assessing and managing risk

•             monitoring certain transactions

•             keeping records

•             reporting suspicious matters to AUSTRAC where required by law.

Importantly, the legislation includes strict “tipping off” provisions. In some circumstances, firms may be prohibited from informing a client if a report has been made to regulators.

Legal professional privilege also continues to apply, although its interaction with the new reporting obligations can be complex.

What should clients do now?

At this stage, clients do not need to be alarmed – but they should be prepared.

The key practical takeaway is that legal and financial transactions will involve greater scrutiny and more formal compliance processes from 1 July 2026 onward.

Clients engaging in property, corporate or trust-related matters should anticipate additional questions and documentation requests as part of standard onboarding and transaction procedures.

These reforms represent a significant shift for professional services in Australia, but for most individuals and businesses, they will simply become another routine part of completing important transactions safely and lawfully.

How we are preparing

Our firm is actively preparing for the commencement of the new AML/CTF regime to ensure we continue to provide efficient, compliant and client-focused services.

We appreciate that additional compliance requirements can sometimes feel burdensome. Our goal is to make the process as streamlined and straightforward as possible while meeting our professional and legal obligations.

If you have questions about how the new AML/CTF laws may affect your matter, please contact our team on (07) 5441-1400 for further guidance.