Selling Off-the-Plan? You are now a Reporting Entity (Table 5, Item 2)
"I am a developer, not an agent. I do not need AML." This is one of the most dangerous misconceptions in Tranche 2. If you have an in-house sales team, you are caught.
The myth: Developers are not agents
Many property developers believe that because they are not licensed real estate agents, they fall outside Tranche 2 obligations. This assumption is incorrect.
The legislation does not focus on licensing status. It focuses on the activity of selling real estate in the course of business.
The reality: Section 6, Table 5, Item 2
Under the reformed AML/CTF Act, Section 6, Table 5, Item 2 captures anyone who provides:
Table 5, Item 2: Real Estate Services
"Selling real estate in Australia in the course of carrying on a business"
This includes developers who sell directly to purchasers, regardless of whether they use external agents.
When does this apply?
You are caught by Table 5, Item 2 if:
In-house sales team
You employ staff who sell apartments, house-and-land packages, or other real estate directly to purchasers without using an external agent.
Off-the-plan sales
You sell properties before construction is complete, with contracts exchanged directly between your company and purchasers.
Display suite operations
You operate a display suite where your staff (not external agents) take expressions of interest and process contracts.
What if I use external agents?
If you exclusively use licensed external real estate agents to sell your developments, the agents become the reporting entities for those sales. In that scenario:
- The agents must have AML/CTF programs covering your sales
- The agents perform customer due diligence on purchasers
- The agents file any necessary suspicious matter reports
However, if you have any direct sales channel (website enquiries handled in-house, a display suite with your own staff, direct negotiations with investors), you become a reporting entity for those transactions.
The impact: What you need by 1 July 2026
If you are caught by Table 5, Item 2, you must have:
Developer AML/CTF Requirements
- AUSTRAC enrolment: Register as a reporting entity before 31 March 2026
- AML/CTF program: Document your risk assessment and policies (Sections 26B-26F)
- Customer due diligence: Procedures to identify and verify purchasers
- AML Compliance Officer: Appoint a responsible person with appropriate authority
- Staff training: Train sales staff on red flags and reporting obligations
- Record keeping: Maintain transaction and CDD records for 7 years
Higher risk factors for developers
Developer sales often carry elevated ML/TF risk factors that your program must address:
- High-value transactions: Off-the-plan sales often exceed $500,000
- International purchasers: Foreign investment in Australian property is common
- Extended settlement periods: Long gaps between contract and settlement create monitoring challenges
- Deposit structures: Large deposits held over time require source of funds consideration
- Bulk purchases: Investors buying multiple units warrant enhanced scrutiny
What you need to do now
- Audit your sales channels: Identify whether any sales occur without external agents
- Assess your exposure: Calculate how many direct sales you conduct annually
- Budget for compliance: Factor AML/CTF program costs into your development budgets
- Enrol with AUSTRAC: Complete your registration before the deadline
- Implement your program: Have documentation and training in place by 1 July 2026
Key Takeaway
Section 6, Table 5, Item 2 catches anyone "selling real estate in Australia in the course of carrying on a business" - including property developers with in-house sales teams. If you sell off-the-plan through your own staff, you need a full AML/CTF program by 1 July 2026. Using external agents for some sales does not exempt your direct sales channel.
Read our complete Tranche 2 Guide
Key dates, affected sectors, obligations and how to prepare
Disclaimer: This article is general information only. It is not legal, financial or compliance advice. HeadStart Docs™ provides free compliance documents, not legal services.
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