Does AML/CTF Apply to Property Management in Australia?

For ordinary rental management, generally no. Managing rental properties for landlords is not one of the real estate designated services in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), and a lease for a term of 30 years or less is not “real estate” under the Act at all. The money side is addressed too: the AML/CTF Rules take a real estate agent’s service of managing rental income and expenses through a trust account outside the professional services item that captures handling client money.

That does not exempt every service a property management business offers. Brokering a sale, including selling a property you manage for a landlord, is a designated service. Brokering the transfer of a lease of more than 30 years can be one. And client money handled for some purpose other than rental income and expenses needs its own designated-service assessment. This guide sets out where the line sits and how to reflect it in your program.

TL;DR

• The Act’s real estate designated services are brokering the sale, purchase or transfer of real estate, and selling or transferring real estate as part of a business selling real estate. Property management is not on that list.
• A lease for a term of 30 years or less (not counting options to renew) is excluded from the Act’s definition of “real estate”. Standard residential and most commercial leases fall outside it.
• Handling client money can be a professional designated service in its own right, but rule 2.1 of the AML/CTF Class Exemptions and Other Matters Rules excludes a real estate agent managing rental income and expenses through a trust account.
• Selling a managed property is a designated service. When a landlord engages your agency to sell, the landlord becomes a sales customer and seller due diligence comes first.
• Leases of more than 30 years are real estate, so brokering their sale or transfer can be a designated service.
• If your agency sells as well as manages, your enrolment, program and risk assessment cover the sales work. Record why ordinary rental management sits outside them and how you handle the points where the two meet.

Table of contents

• What the Act regulates in real estate
• Why a residential lease is not “real estate”
• The trust account question
• Where property management meets AML/CTF
• Scenarios: in scope or out of scope?
• What to put in your AML/CTF program
• Common misconceptions
• Our perspective
• How AML Guard helps
• FAQ
• Sources

What the Act regulates in real estate

The real estate designated services are in table 5 of section 6 of the Act:

AUSTRAC’s real estate designated services guidance says you are likely to provide these services if you work as a buyer’s or seller’s agent, or if you are a developer or other business selling house and land packages, apartments off the plan or blocks of land in new subdivisions without engaging independent agents. It describes a broker as someone who acts as an intermediary or agent for another person for consideration, and gives negotiating, or finding a counterparty, in return for commission as a common indicator.

Finding a tenant, collecting rent, arranging repairs and conducting inspections are not on that list.

Why a residential lease is not “real estate”

Section 5 of the Act defines real estate to include a leasehold interest in land in Australia, but then excludes “a leasehold interest under a lease for a term (excluding options for further terms) of 30 years or less”. AUSTRAC’s guidance gives examples of excluded interests: leases of 30 years or less, easements and restrictive covenants, mortgagee interests, and dwellings not attached to land, such as caravan parks and some retirement villages. It also says a business involved in the sale, purchase or transfer of those excluded interests won’t be providing a designated service relating to real estate.

So when you negotiate a 12-month residential tenancy or a five-year commercial lease with options, you are not brokering a transfer of real estate as the Act defines it.

The flip side: a lease of more than 30 years is real estate. AUSTRAC’s examples include 99-year leases in the Australian Capital Territory, crown and pastoral leases, and residential site agreements where the leasehold term is longer than 30 years.

The trust account question

Property managers handle client money, and the Act has a separate professional services item that can capture that. Item 3 of table 6 covers receiving, holding and controlling (including disbursing) or managing a person’s money, accounts, securities, virtual assets or other property as part of assisting the person in the planning or execution of a transaction, or otherwise acting for or on behalf of a person in a transaction, in the course of carrying on a business.

Item 3 does not apply in the circumstances listed in section 6(5C). Two of them matter for property managers.

Section 6(5C)(b), the incidental payments exclusion. It applies only if the business does not provide any designated services other than item 3 services, and the money is held for payments reasonably incidental to a service that is not a designated service. The note to section 6(5C) says: “An example of a circumstance to which paragraph (b) applies is fees paid to a barrister for representation in legal proceedings or property management services.” AUSTRAC’s guidance says this exclusion applies at the business level: you consider all the services the entity provides, not each practice area separately. An agency that also brokers sales provides another designated service, so this exclusion does not help it.

Section 6(5C)(f), circumstances in the Rules. This is the one that does the work for most agencies. Rule 2.1 of the Anti-Money Laundering and Counter-Terrorism Financing (Class Exemptions and Other Matters) Rules 2007, inserted from 31 March 2026, specifies the circumstance where money, accounts or other property are “received, held, controlled or managed as part of the provision by a real estate agent of the service of managing rental income and expenses through a trust account”. AUSTRAC’s professional services guidance describes it the same way: item 3 does not apply where a real estate agency manages rental income and expenses through its trust account.

On its wording, rule 2.1 is not limited to agencies that provide no sales services: unlike the incidental payments exclusion, it contains no condition about the agency’s other services. AUSTRAC has not addressed mixed agencies specifically, so a sales and management agency relying on it should document that reading and check its facts: the money must be rental income and expenses, managed through a trust account, by a real estate agent.

The rule removes rental trust accounting from item 3; it does not change anything about the agency’s sales work.

Where property management meets AML/CTF

Most agencies with a rent roll also sell. These are the points where the two meet.

• A landlord engages you to sell. Selling the property is brokering a sale under table 5 item 1. AUSTRAC’s guidance says a seller’s agent starts providing the designated service to the seller when an agreement to broker the sale is signed. Section 28(1) of the Act requires initial customer due diligence on that customer before you start providing the service, unless a delay permitted under section 29 applies. A long management relationship is not a substitute.
• The buyer is your customer too. Under table 5 item 1 the buyer is also your customer. The AML/CTF Rules (section 6-32) allow the agent acting for the seller to start the service for the buyer before due diligence is complete, subject to the conditions in section 29 of the Act. Due diligence must then be completed as soon as reasonably practicable, and no later than the earlier of 28 days after exchange of contracts and 3 days before the initially agreed settlement day. A permitted delay is conditional, and it is not permission to deal with a sanctioned person: AUSTRAC’s real estate starter kit example delays due diligence on a buyer but completes sanctions screening without delay. We recommend the same.
• A tenant buys the property they rent. The tenant is now a buyer, and your sales obligations apply to them.
• Long leases. If your leasing team handles the sale or transfer of a lease of more than 30 years, that interest is real estate. Check the work against AUSTRAC’s real estate guidance.
• Suspicion. The suspicious matter reporting obligation in section 41 arises in connection with a designated service: when you start or propose to provide one, or when a person requests or asks about one you ordinarily provide. Your team should know that a concern about a landlord who becomes a seller, or a buyer you meet through a managed property, belongs with your AML/CTF compliance officer.

Scenarios: in scope or out of scope?

What to put in your AML/CTF program

Section 26C of the Act requires a risk assessment of the money laundering, terrorism financing and proliferation financing risks you may reasonably face in providing your designated services. For an agency that sells and manages, we suggest:

1. State your scope. List the designated services you provide (sales brokering, including any project sales you broker for a developer). Record that ordinary residential and short-term leasing is not itself a table 5 service, and that managing rental income and expenses through a trust account, as rule 2.1 describes, is excluded from table 6 item 3. Cite the reasons: the table 5 list, the 30-year exclusion in the definition of real estate, and rule 2.1. Record and escalate any activity that falls outside those facts.
2. Set the handover trigger. Write down the moment a property management client becomes a sales customer (when an agreement to broker the sale is signed, on AUSTRAC’s guidance) and who runs due diligence from that point.
3. Train the property management team. They meet landlords who later sell and tenants who later buy. They need to know when to hand over and how to escalate a concern.
4. Watch for exceptions. Any long lease, sales deposit, or client money handled for something other than rental income and expenses goes to the compliance officer for a decision.

AUSTRAC’s May 2026 statement of expectations says that where its guidance does not address an issue you face, it expects you to develop your own position, document it and keep records of any advice. A short written scope note does exactly that.

Common misconceptions

• “Our property managers have to do AML checks on every tenant.” Not under the Act. A residential tenancy is not a real estate designated service. Your state tenancy and privacy obligations still apply.
• “We’re mostly property management, so we don’t need to enrol.” If the agency brokers any sales, it provides a designated service and must enrol. Our guide to missing the AUSTRAC enrolment deadline explains the 28-day rule.
• “A lease can never be real estate.” A lease of more than 30 years, not counting options, is.
• “Our trust account makes us a professional services business.” For managing rental income and expenses through the trust account, rule 2.1 says otherwise. Other uses of client money need their own check.

Our perspective

Property management is where most agencies first notice how precisely the Tranche 2 boundary was drawn. The useful response is not to apply sales-level checks to every tenant, which the Act does not require, but to be exact about the handover: the day a landlord signs a sales agreement, that landlord is a customer with full due diligence, and the file should show it.

We also think the scope note is undervalued. If AUSTRAC asks how you scoped your designated services and where they meet the rent roll, your file should already show that assessment and the rule it relies on.

How AML Guard helps

AML Guard is built for Australian Tranche 2 reporting entities. It runs initial customer due diligence on sellers and buyers, including identity verification, screening and risk rating, with an officer reviewing and approving the outcome. Its guided wizards produce your ML/TF risk assessment, AML/CTF program, customer acceptance policy and training manual, and can pre-fill later documents from your risk assessment. Each check and decision is recorded against the case.

AML Guard is not self-service: firms start with a demo.

FAQ

Do property managers need to do AML/CTF checks on tenants?

No. Arranging a residential tenancy is not a real estate designated service, and a lease of 30 years or less is excluded from the Act’s definition of real estate. AML/CTF customer due diligence obligations attach to designated services, so they apply once a tenant becomes a buyer in a sale your agency brokers.

Is a rental trust account a designated service?

Not for managing rental income and expenses. Rule 2.1 of the AML/CTF Class Exemptions and Other Matters Rules excludes a real estate agent’s management of rental income and expenses through a trust account from table 6 item 3 of the Act. Client money handled for other purposes needs its own assessment.

Does an agency that only does property management need to enrol with AUSTRAC?

Not merely because it manages rental properties. A property-management-only agency should still document why it considers itself outside the regime, and check unusual work such as long leases or other client money. If it brokers any sale, it must enrol: see our guide to the enrolment deadline.

What happens when a landlord we manage for decides to sell?

The landlord becomes a sales customer. On AUSTRAC’s guidance, a seller’s agent starts providing the designated service when the agreement to broker the sale is signed, and section 28 of the Act requires initial customer due diligence before that service starts, unless a delay permitted under section 29 applies.

Are leases over 30 years covered by AML/CTF?

Potentially. A leasehold interest under a lease of more than 30 years, not counting options for further terms, falls within the Act’s definition of real estate. Brokering the sale or transfer of such an interest, or selling it as part of a business selling real estate, can be a designated service, depending on what you do and for whom.

Does our risk assessment need to cover property management?

Your risk assessment covers the risks you face in providing your designated services. Record how you scoped them and why ordinary rental management sits outside, and cover the points where it meets your sales work, such as landlords who become sellers and tenants who become buyers.

Sources

• Anti-Money Laundering and Counter-Terrorism Financing Act 2006, sections 5 (definition of real estate), 6 (tables 5 and 6, subsections (5C) and (5D)), 26C, 28, 29 and 41 | Federal Register of Legislation
• Anti-Money Laundering and Counter-Terrorism Financing (Class Exemptions and Other Matters) Rules 2007, rule 2.1 | Federal Register of Legislation
• Anti-Money Laundering and Counter-Terrorism Financing Rules 2025, section 6-32 | Federal Register of Legislation
• Real estate designated services | AUSTRAC
• Professional designated services | AUSTRAC
• Real estate program starter kit: examples of dealing with customers | AUSTRAC
• Update to regulator statement of expectations (May 2026) | AUSTRAC

Related on AML Guard: Real estate AML obligations · Real estate CDD checklist · Buyer due diligence in real estate · When AML compliance starts in a property transaction