KEY TAKEAWAYS: From 1 July 2026, AML Tranche 2 reforms will require lawyers, conveyancers and real estate agents to conduct stricter identity and source-of-funds checks. Buyers and sellers who don’t provide documents promptly risk delays in their property transactions. The buying and selling process itself isn’t changing , compliance requirements are increasing behind the scenes. Being organised early (ID, trust deeds, company records, proof of funds) will help keep your settlement on track. What is AML Tranche 2? AML Tranche 2 refers to reforms expanding Australia’s Anti-Money Laundering laws to lawyers, conveyancers and real estate agents from 1 July 2026, requiring identity and source-of-funds verification in property transactions. If you’re buying or selling property in New South Wales, you may start hearing your lawyer, accountant, or real estate agent talk about “AML Tranche 2.” It sounds technical, but the idea is simple. Here’s what it means for you, in plain English. What is AML? AML stands for Anti-Money Laundering (AML). Money laundering is when people try to hide illegally obtained money by moving it through legitimate businesses, and property is one of the most common ways this happens. Australia already has AML laws under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. These laws are enforced by the Australian transaction Reports and Analysis Centre (AUSTRAC). Until now, the rules mostly applied to banks and financial institutions. That’s about to change from July 2026. What Specifically is “Tranche 2”? “Tranche 2” is the second stage of AML reforms. It expands AML laws to cover professionals involved in property transactions, including: Lawyers and conveyancers Accountants Real estate agents Buyer’s agents Trust and company service providers In other words, the people who help you buy and sell property in NSW. Why is this Happening? Australia has been under pressure internationally to strengthen its anti-money laundering laws. The global watchdog Financial Action Task Force has previously criticised Australia for not regulating “gatekeeper” professions like lawyers and real estate agents. Tranche 2 reforms are designed to fix that. What Does This Mean for NSW Property Buyers? If you’re purchasing property in NSW, expect: More Identity Checks You will likely need to provide: Passport or driver licence Proof of address Source of funds information Even if you’ve worked with the same solicitor for years. Questions About Your Money You may be asked: Where did your deposit come from? Is it savings, inheritance, business income, overseas transfer? Are you purchasing through a trust or company? This isn’t your lawyer being nosy, it’s now part of their legal obligations. Delays if Information Isn’t Provided If documents aren’t supplied promptly, your transaction could slow down. What Does This Mean for NSW Sellers? If you’re selling property, you may also: Be Verified Your identity will likely need formal verification. Be Asked About Ownership Structure If the property is held in: A trust A company A self-managed super fund Additional documentation may be required. Experience Slightly Longer Onboarding Agencies and law firms will need to complete compliance checks before proceeding. Will This Make Property More Expensive? Possibly… but not dramatically. Professionals will need: Compliance systems Staff training Risk assessments Ongoing reporting procedures Some of these costs may be passed on through slightly higher fees. However, the goal is to increase transparency and protect the property market long term. What Isn’t Changing? You can still buy and sell property as usual Contracts and conveyancing processes remain the same Settlement timelines don’t automatically change The difference is behind the scenes, more compliance checks before and during the transaction. When Are These Changes Happening? The AML Tranche 2 officially commence on 1 July 2026. What Should Buyers and Sellers Do Now? ✔ Be prepared to provide ID promptly ✔ Keep records of where your deposit funds come from ✔ If using trusts or companies, ensure documents are up to date ✔ Allow a little extra time at the start of a transaction If everything is legitimate (which it is for most buyers and sellers), this should simply be an administrative step. The Bottom Line AML Tranche 2 is about closing loopholes and increasing transparency in the Australian property market, including here in NSW. For everyday buyers and sellers, it means: More questions More paperwork More identity verification But not a fundamentally different buying or selling experience. If you’re unsure how the changes may affect your specific transaction, speak with your conveyancer early in the process. 📞 Get in touch with Coutts today to start your buying/selling process with clarity. Schedule an Appointment Now ABOUT KAY VITOGIANNIS: Kay joined the Coutts team in May 2021 working as a Licensed Conveyancer within our Property & Conveyancing team, based in our Narellan office. Kay has over 20 years of experience in the Legal industry. She began her journey in CBD Conveyancing firms as a secretary and attained her Advanced Diploma in Conveyancing in December 2010. For further information please don’t hesitate to contact: Kay Vitogiannis Licensed Conveyancer info@couttslegal.com.au 1300 268 887 Contact Coutts today. This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you. Contact Us