AUSTRAC has started issuing $21,840 fines to companies that should have enrolled under anti money laundering law and did not. Builders who own the land, build and sell without an independent agent may be among them. Building on a client’s land is a different matter.
A builder who owns the land, builds, and sells the finished home without an independent agent can now be providing the same regulated service as a property developer under anti money laundering law.
HIA says some builders, along with property developers and land sellers, have new obligations from 1 July 2026. What decides it is not the size of the business. It is whether the builder is selling a home on land it owns, or building on land the client already owns.
On 30 September, AUSTRAC said it had begun issuing infringement notices to businesses in the real estate, accounting and jewellery sectors that it believes failed to enrol within 28 days of providing a designated service. The notices were issued at $21,840 for companies and $4,368 for individuals, and AUSTRAC says the amounts can accrue daily.
The service that reaches builders is selling without an independent agent
The Act works through a list of designated services. Two of the new ones relate to real estate. The first is brokering a sale, which is what agents do. The second, item 2 of table 5, is selling or transferring real estate in the course of carrying on a business selling real estate, where the sale is not brokered by an independent real estate agent.
AUSTRAC’s real estate guidance gives three examples of that second service: house and land packages, apartments off the plan, and blocks of vacant land in new subdivisions. It says the service is still provided where a business sells through its own in house agents, sales staff or marketing employees rather than an external agency.
For that service, the customer is the buyer. The required checks are checks on the person buying.
What is a designated service?
A designated service is an activity listed in section 6 of the Anti Money Laundering and Counter Terrorism Financing Act 2006. A business that provides one becomes a reporting entity and must enrol with AUSTRAC. For a builder, the relevant listing is selling real estate as a business without an independent agent brokering the sale.
A building contract on a client’s land is a different transaction
Most residential building work is not a sale of real estate. The client owns the land, the builder contracts to build on it, and no interest in land passes between them. That covers custom builders, renovators and volume builders whose sales staff sign build contracts on land bought elsewhere.
AUSTRAC’s real estate guidance does not mention building contracts. On the wording of item 2, a contract to build on land the client already owns does not involve the builder selling or transferring real estate. That reading is our analysis of the published guidance. It is not an AUSTRAC ruling.
The position changes when the builder, or a related company, owns the land and sells the finished product. Three common arrangements sit closer to the line:
- a spec home built on a lot the builder bought, then sold
- a house and land package where the builder’s group owns the lot
- a small subdivision where the builder sells completed townhouses or lots
In each case, two questions decide it. Is the business selling real estate as part of how it operates, and is an independent agent brokering the sale?
The meaning of an independent agent has not been defined
Where an agent brokers the sale, AUSTRAC’s guidance treats both buyer and seller as the agent’s customers, so the agent carries the obligations for both.
AUSTRAC has not published a detailed definition of independent. The Property Council’s guide for property developers, last updated on 30 March 2026, says the safest practical reading is a genuinely external third party agency. It says businesses selling through related entities should not assume the exception applies.
That matters for builders with their own sales consultants, and for family groups where a related company does the selling.
A single sale can be enough
AUSTRAC says incidental sales, such as a business selling premises it operates from, are not captured. Nor are private sales of residential property.
That is not a simple numbers test. The Property Council guide says a sale is not excluded merely because it is one off. The question it puts is whether, in substance, the entity is carrying on a business of selling real estate.
A builder who builds homes to sell as part of the business is in different territory from a builder selling the family home. Where a particular operation sits is a question for legal advice.
The difference between the two is not the size of the business. It is who owns the land, and who is doing the selling.
The obligations start before the contract is signed
AUSTRAC says the service begins when there is a commitment to sell, typically when an agreement to sell is entered into. Initial customer due diligence is generally required before the service is provided. The Property Council guide notes that where required checks cannot be completed, the business must not proceed.
AUSTRAC’s obligations factsheet for newly regulated businesses sets out the core requirements:
- enrol with AUSTRAC within 28 days of first providing a designated service
- maintain an AML/CTF program, made up of a risk assessment and policies approved by senior management
- appoint an AML/CTF compliance officer
- identify and verify customers, with enhanced checks where risk is high
- report suspicious matters within three business days, or within 24 hours where terrorism financing is suspected
- report physical cash transactions of $10,000 or more within 10 business days
- keep most records for seven years
AUSTRAC has published a program starter kit for small real estate agencies. It says the kit is not designed for businesses that sell property they own themselves, and gives property developers as the example. Builders selling their own stock have no regulator template to start from.
For a small operator, the program, the training and the reporting become part of running a building business that sells its own stock.
AUSTRAC has moved from guidance to notices
AUSTRAC said before commencement that it would focus its enforcement on businesses that wilfully ignore the obligation to enrol, and those it suspects are complicit in money laundering.
It has followed that order. In late August, AUSTRAC said it had begun issuing section 167 notices to businesses that appeared to provide designated services without enrolling, requiring them to hand over information. Chief executive Brendan Thomas said the period for preparation was over. The infringement notices followed at the end of September.
AUSTRAC has also said that contacting it for help is not treated as a red flag. Its contact centre is on 1300 021 037. Enrolment is a federal obligation, separate from the state licensing and compliance obligations builders already carry.
For most builders, the test is who owns the land
It is the second federal change this year aimed at how a home is sold. The unfair trading law that starts on 1 July 2027 also reaches the sales process.
For builders working under contract on a client’s land, the regime has not changed how a job is signed. For builders who own land, build and sell, it now reaches the point where a buyer commits, and the regulator is checking who has enrolled.
The difference between the two is not the size of the business. It is who owns the land, and who is doing the selling.
Selling your own stock and working through how this applies? Get in touch with our team, and follow The Good Builder for more.
Frequently asked questions
Only where they provide a designated service. For builders, the relevant service is selling or transferring real estate in the course of a business selling real estate, where no independent real estate agent brokers the sale. AUSTRAC’s examples include house and land packages, apartments off the plan and blocks of land in new subdivisions.
AUSTRAC’s real estate guidance does not mention building contracts. Where the client already owns the land, the builder is not selling or transferring an interest in land, so on the wording of the Act the build contract sits outside the real estate service. That is our reading of the guidance, not an AUSTRAC ruling.
On 30 September 2026, AUSTRAC said it had begun issuing infringement notices to businesses it believes failed to enrol within 28 days of providing a designated service. The notices were issued at $21,840 for companies and $4,368 for individuals, and AUSTRAC says the amounts can accrue daily.
Where an independent real estate agent brokers the sale, the agent provides the brokering service and carries obligations for both buyer and seller. AUSTRAC has not defined independent in detail. The Property Council’s guide says sales through related entities should not be assumed to qualify.
The real estate designated services commenced on 1 July 2026. A business must enrol within 28 days of first providing a designated service, which for businesses already selling on 1 July meant by 29 July 2026.
Related articles
- Australia’s Unfair Trading Act Starts 1 July 2027. The Section That Reaches Builders Is Not the One About Pricing.
- Four States Are Rewriting Building Regulation at Once. They Disagree on What the Problem Is.
- Construction Licensing and Compliance in Australia
Last updated: 10 November 2026. Regulatory positions reflect AUSTRAC guidance as published at that date.
General Information Only: The content we publish is provided for general informational and educational purposes. It is not legal, financial or compliance advice and should not be relied on as such. Whether a business provides a designated service depends on its circumstances. Seek independent legal advice, or contact AUSTRAC, before acting on anything in this article.
Author: TGB Editorial
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