A CGT valuation is only useful if it answers the question the tax law asks: market value, at the right date, for the right purpose, with evidence someone else can follow. A few questions before you order help make sure it does. Here they are, with how we answer each.
What is the valuation for?
The purpose shapes everything else. The ATO’s guide expects a valuation report to state its purpose, including the tax provision it was prepared for. It also warns that difficulties are likely when a previous valuation compiled for a different purpose is relied on. Tell the valuer every use at the start, such as capital gains tax and an estate’s records, and who will rely on the report.
How we answer: our reports state the purpose and the valuation date. A report can be relied on for that purpose and date by the client named in it and anyone we agree to in writing.
Which date is it at?
The tax law sets the date, and your accountant tells you which one applies: see every CGT valuation date explained. Ask whether the valuer can value at a past date. The ATO’s guide expects a report to state the valuation date, giving a retrospective valuation as an example, and says a valuation for a future date will not be considered reasonable or acceptable.
How we answer: we value at today’s date or any past date your accountant gives you, never a future date. A value at 30 June 2027 is prepared after that day.
How will the value be worked out, and from which sales?
For homes and vacant land, a valuer commonly compares sales of similar properties from around the date, adjusted for their differences. Ask which sales the value rests on, and whether the report will show them and the adjustments. The ATO’s guide expects the method and the reasons for choosing it to be explained, and recommends a second, cross-check method where possible.
How we answer: each report sets out the market value, the comparable sales it rests on, and the method and assumptions, plainly. See what a valuer looks at.
Is the valuer independent, and is the fee fixed?
The ATO’s guidance on properly instructing a valuer includes acknowledging the valuer’s independence to draw conclusions and write the report, and stating that the fee does not depend on the outcome. Its guide also expects a report to declare the valuer’s independence and any conflicts of interest.
The opinion has to be the valuer’s own. You can point a valuer to sales you know of, and they will consider them, but they test each one against the other evidence rather than aiming at a figure you have in mind.
How we answer: our fees are fixed and confirmed in writing before any work starts, so they never depend on the value. If we cannot take on the work, for example because of a conflict of interest, we tell you.
Desktop or inspected?
A desktop valuation works from sales evidence and records without a visit. An inspected valuation adds a visit by the valuer. Views differ on how far to go. The ATO’s guide says that where a valuation is straightforward, the report and records may be brief. The Australian Property Institute, a professional body for valuers, describes a desktop report as an indicative value only, not a valuation report, and recommends a comprehensive inspection valuation report where the tax system relies on the value.
How we answer: your accountant chooses which suits your return, and we tell you if we think an inspection would suit your property better. See desktop or inspected.
Who is the valuer, and who signs the report?
The ATO’s guide says the onus for a defensible valuation remains with you even when a professional is engaged, and that you are responsible for making sure the valuer is suitably knowledgeable and experienced, receives appropriate instructions and remains objective. It expects a report to identify the valuer.
How we answer: a property valuer reviews and signs every report, and their name is on it. We confirm the valuer to you in writing before anything is booked, so you can ask about their experience with your kind of property.
What happens if records are missing?
Most CGT dates are in the past, so records stand in for an inspection of the property as it was. The ATO’s guide says that where a valuer does not have all the information needed, the outstanding information should be identified in the report.
How we answer: if something cannot be found, the report states what the valuer has assumed. See what the valuer needs.
What will it cost?
How we answer: a Desktop CGT Valuation is $149 and an Inspected CGT Valuation is $495, both including GST, and a second valuation date in the same report is $149. Commercial, rural and development property, and anything likely to be worth more than $3 million, is quoted before anything is booked. Transfers to family, or to a company or trust, are quoted too. We confirm the valuer, fee and timing in writing, and nothing is booked or charged until you accept.
The timing depends on the property, the date and the records, so we confirm it in writing before you commit. See how long a CGT valuation takes and pricing.
We value property. We do not give tax advice. Your accountant decides what evidence suits your return.