The CDD transition period doesn't give real estate agents extra time
A 3-year transition for customer due diligence just became law, but it only applies to existing reporting entities. Real estate agents must comply with full CDD requirements from 1 July 2026.
The CDD transition period doesn't give real estate agents extra time
The AML/CTF Transitional Rules 2026 took effect on 31 March 2026.
One of the rules they introduced is a 3-year transition period for customer due diligence (CDD).
Real estate agents have been asking whether this gives them more time.
The short answer: no.
The transition period is specifically designed for businesses that were already regulated before the 2024 reforms. It lets them migrate from old CDD procedures to new ones without a hard cutover. It was always intended for existing reporting entities (banks, remittance providers, financial services businesses), not for newly regulated sectors like real estate.
If your agency is coming into the AML/CTF regime for the first time, you do not benefit from this transition. You must comply with the new CDD requirements from day one: 1 July 2026.
What the transition period actually covers
The 3-year CDD transitional period runs from 31 March 2026 to 30 March 2029.
During that window, existing reporting entities (businesses that were already on the AUSTRAC register before Tranche 2) can continue using their previous customer identification procedures while they update their systems and documentation to meet the new requirements.
This applies to businesses like banks, credit providers, and remittance dealers that have been reporting to AUSTRAC for years.
It does not apply to real estate agents, lawyers, accountants, or any other business entering the AML/CTF regime through Tranche 2.
AUSTRAC's own transitional rules document is explicit about this: "The initial CDD transitional period will not apply to newly regulated businesses (tranche 2) that commence enrolment from 31 March 2026."
There is no grace period for CDD. From 1 July 2026, you need functioning CDD procedures in place. If you do not, you are non-compliant.
What the transitional rules do give real estate agents
There are aspects of the Transitional Rules 2026 that do apply to newly regulated businesses, and some of them are genuinely useful.
Compliance officer notification window. You have until 29 July 2026 to notify AUSTRAC of your AML/CTF compliance officer, which is 28 days after obligations commence. Your compliance officer needs to be appointed before 1 July, but you have four weeks to complete the formal AUSTRAC notification.
Independent evaluation: staggered deadlines. Newly regulated agencies do not need to complete their first independent AML/CTF program evaluation until at least 30 June 2029. The exact deadline depends on the last two digits of your AUSTRAC Account Number, which is assigned when you enrol. Agencies with different account endings have deadlines ranging from 30 June 2029 to 31 December 2030.
This is not a CDD concession. It is a practical measure to spread the load of evaluations across thousands of newly regulated businesses.
Deemed CDD for counterparties. The rules also introduced a specific provision for real estate agents who cannot obtain full CDD information from a counterparty. For instance, when you represent the seller and the buyer refuses to cooperate with identification requests. Where you have made a genuine attempt and cannot proceed, this provision provides some protection.
This is a narrow provision and it does not allow you to skip CDD on clients you represent.
What needs to be in place by 1 July 2026
There is no flexibility on these obligations.
By 1 July 2026, you need:
- AUSTRAC enrolment completed (enrolment opened 31 March 2026, closes 29 July 2026, but your obligations start 1 July regardless)
- A written AML/CTF program (risk assessment, policies, procedures)
- A compliance officer appointed at senior management level
- Staff trained on AML/CTF obligations before they perform AML-relevant duties
- CDD procedures ready to use from the first property transaction you broker after 1 July
From 1 July, every time you broker a property sale or purchase, you need to collect and verify the identity of your client before the service is provided. The CDD transition period does not change this.
The practical implication
If you have been treating the "transitional rules" as breathing room for CDD, stop.
The 92 days from 31 March to 1 July 2026 are the window to build your program. They are not a grace period after the deadline.
You do not need the transition period if your program is ready on 1 July. And the program is not as difficult to build as it sounds. AUSTRAC published a free Program Starter Kit specifically for real estate agencies with up to 15 staff providing one designated service. It includes a risk assessment template, a process document, and a guide to customising both.
AML Simple's program generator is built to the same structure. If you work through the setup wizard, you end up with a program consistent with what AUSTRAC's own Starter Kit produces.
Key dates for newly regulated real estate agencies
| Date | What it means |
|---|---|
| 31 March 2026 | AUSTRAC enrolment portal opens. AML/CTF Transitional Rules 2026 take effect. |
| 1 July 2026 | AML/CTF obligations commence. CDD, ongoing monitoring, and reporting begin. |
| 29 July 2026 | Enrolment close date. Compliance officer notification deadline. |
| 31 March 2027 | First Annual Compliance Report due (covering 1 July – 31 December 2026). |
| 30 June 2029 – 31 December 2030 | First independent evaluation (staggered by AUSTRAC Account Number). |
Source: AML/CTF Amendment Act 2024; AML/CTF Transitional Rules 2026 (AUSTRAC). Penalty unit value: A$330 (from 7 November 2024; next indexation due 1 July 2026).
Civil penalties for non-compliance are up to A$33,000,000 per contravention for a body corporate. Most real estate agencies operate as Pty Ltd companies, so that is the rate that applies. Penalties accumulate across contraventions. Running a business from 1 July without functioning CDD creates multiple exposures.
Where to start
The fastest path to being ready by 1 July:
- Enrol with AUSTRAC at austrac.gov.au (takes 20-30 minutes)
- Complete your ML/TF/PF risk assessment (the AUSTRAC Starter Kit has a template)
- Build your AML/CTF program from the risk assessment output
- Appoint a compliance officer and train your staff
- Set up your CDD process before your first post-July transaction
AML Simple guides you through each of these steps. The program wizard takes about 15 minutes for a straightforward small agency. CDD verification works by sending a secure link to your client: they upload their ID, you confirm it.
The AUSTRAC Starter Kit and AML Simple are designed so you can build your initial program yourself.