AUSTRAC Tranche 2 for Lawyers & Conveyancers (2026)
From 1 July 2026, Australia's anti-money laundering regime reaches a group of professionals it has never formally covered before: lawyers, conveyancers, accountants, real estate professionals and others. These "Tranche 2" reforms amend the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and bring "Designated Non-Financial Businesses and Professions" (DNFBPs) under AUSTRAC's supervision. For legal practitioners and conveyancers, that means customer due diligence, record-keeping and — where the law requires it — reporting suspicious activity and large cash transactions to the regulator. This guide explains what changes, which of your services are caught, and what you should be doing to prepare.
The short version
- From 1 July 2026, lawyers and conveyancers become reporting entities under the AML/CTF Act when they provide specified designated services (real-estate transactions, forming or managing companies and trusts, transferring assets).
- Obligations attach to the service you provide, not your professional title — you only carry them when a matter falls within a designated service.
- Core duties include enrolling with AUSTRAC, running customer due diligence (CDD), keeping records, and lodging Threshold Transaction Reports (TTRs) and Suspicious Matter Reports (SMRs).
- AUSTRAC releases new TTR and SMR forms on 1 July 2026 that expand the reportable details required.
- Legal professional privilege is preserved, but it is narrower than many assume — it protects privileged communications, not client identity or transaction facts.
A note on sources. This information is current as of July 2026 and draws on AUSTRAC's published guidance, including its page on changes to transaction reporting from 1 July 2026 and its threshold-transaction-report, suspicious-matter-report and AML/CTF reform pages. Rules and guidance evolve — if you spot something that needs correcting, tell us at didit.me/contact.
What is changing on 1 July 2026
Two distinct things happen on the same day, and it helps to keep them separate.
First, the regime expands. The Tranche 2 reforms bring DNFBPs into the AML/CTF regime for the first time. This group includes lawyers, accountants, conveyancers, real estate professionals (agents and property managers), dealers in precious metals and stones, and trust and company service providers (TCSPs). Once you provide a designated service, you are a reporting entity with the full set of obligations that entails.
Second, the reporting forms change. AUSTRAC releases new TTR and SMR forms on 1 July 2026. The new AML/CTF Rules expand the reportable details required in both report types. AUSTRAC's stated goal is better data quality and a more streamlined AUSTRAC Online experience. For the exact list of new fields, refer to austrac.gov.au — we deliberately don't reproduce a field list here because it is the kind of detail that must come from the source.
Which legal and conveyancing designated services trigger obligations
The single most important concept in Tranche 2 is this: obligations follow designated services, not professions. You do not carry AML obligations across your whole practice simply because you are admitted as a lawyer or licensed as a conveyancer. You carry them when a specific matter falls within a designated service.
For legal practitioners and conveyancers, the designated services commonly include:
| Designated service area | Typical examples |
|---|---|
| Real-estate transactions | Acting for a buyer or seller in the purchase or sale of real property; conveyancing settlement |
| Forming or managing companies and trusts | Incorporating a company, establishing a trust, acting as or arranging a nominee director or trustee |
| Transferring assets / business entities | Buying or selling a business; managing client money or assets in connection with a transaction |
| Managing client funds | Handling money, accounts or securities on a client's behalf as part of a designated service |
A litigation-only practice, or advice that never touches these transactional services, may fall outside the designated-service net — but this is exactly the kind of line you should confirm against AUSTRAC's guidance and your own adviser, because the boundary is fact-specific.
Customer due diligence for legal and conveyancing matters
Once a matter is a designated service, you must apply customer due diligence before (or in defined cases, while) providing it. In practical terms, CDD means you:
- Identify the customer and verify that identity from reliable, independent sources.
- Identify beneficial owners — the individuals who ultimately own or control a company, trust or other structure you are acting for.
- Understand the purpose and nature of the matter, and where relevant the source of funds.
- Screen against sanctions lists and for politically exposed persons (PEPs).
- Apply ongoing due diligence, keeping information current and monitoring for activity that doesn't fit the expected profile.
The risk here is not hypothetical. Conveyancing and company/trust formation are exactly the services criminals use to move and disguise value, precisely because a professional's involvement lends legitimacy. Robust CDD is your first and best control.
Where Didit helps: verifying a customer's identity from their government ID and a live selfie, and resolving the beneficial owners behind a corporate or trust client, is the operational heart of CDD. Automating that step gives you a consistent, auditable record for every designated-service matter.
Reporting: TTRs and SMRs
Two report types matter most for practitioners entering the regime. Both are lodged through AUSTRAC Online.
| Threshold Transaction Report (TTR) | Suspicious Matter Report (SMR) | |
|---|---|---|
| Trigger | A cash transaction of AUD 10,000 or more (or the foreign-currency equivalent) | You form a suspicion about a matter (e.g. money laundering, fraud, terrorism financing) |
| Deadline | Within 10 business days | Within 3 business days of forming the suspicion — 24 hours if it relates to terrorism financing |
| New form from 1 July 2026 | Yes — expanded reportable details | Yes — expanded reportable details |
The expanded fields mean the quality of the underlying data you hold matters more than ever. You cannot complete an accurate report about a party whose identity you never properly verified.
Legal professional privilege — at a high level
Understandably, this is the reform practitioners worry about most. At a high level: the AML/CTF regime is designed to sit alongside legal professional privilege, not override it. Genuinely privileged communications remain protected, and the framework includes mechanisms so that lawyers are not compelled to disclose privileged material.
Two cautions, though. First, privilege attaches to confidential legal advice — it does not cloak the facts of a transaction, a client's identity, or the money that moves through your trust account. Those are ordinarily not privileged and can sit squarely within your reporting obligations. Second, privilege is a legal question that turns on the specific communication. The safest posture is to build a process that identifies potentially privileged material early and escalates it, rather than assuming privilege blankets a whole matter. Confirm the boundaries with AUSTRAC's guidance and your professional body.
Transition timeline: which deadline applies to you
AUSTRAC has staggered the move to the new forms based on when you enrolled.
| Your situation | New forms |
|---|---|
| Enrolled with AUSTRAC on or before 30 March 2026 | You may transition to the new TTR/SMR forms any time between 1 July 2026 and 30 March 2029 |
| Enrol after 30 March 2026 | You must use the new forms from 1 July 2026 |
Since most newly-captured legal and conveyancing practices will enrol as part of Tranche 2, many will be on the new forms from day one. Plan your systems around that.
A practical preparation checklist
- Map your designated services. Work through your matter types and mark which ones are designated services. This defines the scope of everything else.
- Enrol with AUSTRAC if you provide any designated service.
- Write an AML/CTF program proportionate to your risk, with clear CDD, reporting and record-keeping procedures.
- Stand up a CDD workflow — identity verification, beneficial-ownership resolution, sanctions and PEP screening — that runs consistently on every in-scope matter.
- Prepare for the new TTR/SMR forms and confirm the expanded field requirements at austrac.gov.au.
- Train your team to recognise suspicious matters and to respect the 3-business-day (and 24-hour terrorism-financing) SMR timeframes.
- Document everything. Records are both a legal obligation and your evidence of good-faith compliance.
How identity verification helps you meet these obligations
Your reporting obligations are only as good as the identity and transaction data behind them. This is where an identity and AML platform does the operational heavy lifting — not the lodging of reports (you and your compliance officer do that), but collecting and verifying the data that makes accurate reports possible.
- KYC (customer identity verification): confirm a client is who they say they are from a government ID and biometric check, satisfying the identify-and-verify core of CDD.
- KYB (business verification): verify corporate and trust clients and surface the beneficial owners behind them — essential for the company/trust-formation and asset-transfer services Tranche 2 covers.
- Sanctions and PEP screening: check customers and beneficial owners against sanctions lists and PEP databases at onboarding and on an ongoing basis.
- Transaction monitoring: detect the patterns and thresholds that signal a reportable threshold transaction or a suspicious matter, so nothing slips past your 10-day and 3-day clocks.
Where Didit helps: Didit provides KYC, KYB, AML sanctions/PEP screening and transaction monitoring through one API, with public per-check pricing and 500 free verifications a month. To be clear about scope — Didit does not lodge TTRs or SMRs on your behalf. It helps you collect and verify the identity data, and detect the activity, that underpins accurate reports.
Getting ready
Tranche 2 is a genuine shift for legal and conveyancing practices, but it is a manageable one if you start with the fundamentals: know which of your services are designated, verify who your clients really are, and build reporting habits around AUSTRAC's deadlines. Getting your identity-verification and screening layer right now means the reporting obligations become a matter of process, not panic.
If you want to build that layer, Didit offers KYC, KYB, AML screening and transaction monitoring through a single API — see didit.me to get started.
This article is general information only and is not legal advice. AML/CTF obligations depend on your specific circumstances. Confirm how these rules apply to your practice with AUSTRAC and your own professional adviser.
