Should I get a valuation when I start renting out my old home?

If the rule applies to you, the ATO’s guidance is to get a market valuation of the home as at the day it was first used to produce income. The rule applies if you first rented it out after 20 August 1996 and a later sale would only be partly exempt. Your accountant confirms whether it applies and which date to use.

I rented out my house years ago. Is it too late for a valuation?

No. A retrospective valuation values the home as it was on the day it was first rented, using sales from around that date. The ATO says it is best to value the home when you first use it to produce income, but that you can arrange a valuation later if necessary.

What date should the valuation be at?

The day the home was first used to produce income, such as the day it was first rented out. The six-year choice can affect how the rules apply, so your accountant confirms the date, and we value at the date your accountant gives you.

We renovated after the tenants moved in. Is that included?

No. The valuation is of the home as it was on the day it was first used to produce income. Plans, invoices and dated photos help the valuer show what was there then and what was added later.

Can I use a real estate agent’s appraisal instead?

The ATO looks for a valuation that is objective and supported by evidence, and says valuations by professional valuers are more credible than those by someone who is not one. An agent’s appraisal is usually an opinion of a likely selling price, not a valuation report prepared for tax, so it gives your figure less support.

How much does it cost?

The Desktop CGT Valuation is $149 including GST and the Inspected CGT Valuation is $495. A second valuation date in the same report is $149. Homes likely to be worth more than $3 million are quoted before anything is booked.

Valuation When Your Home Becomes a Rental

Valuing your home when it becomes a rental

If you first rented out your home after 20 August 1996 and a later sale would only be partly exempt from capital gains tax, you are generally treated as having bought it on the day it was first used to produce income, at its market value then (section 118-192). The ATO’s guidance is to get a market valuation of the home when you first use it to produce income, and it says you can arrange one later if necessary. CGT Property Valuations by APA values homes in NSW, VIC, ACT and NT as they were on that day, from $149 including GST.

Renting out the home you used to live in can change how capital gains tax works out the gain when you sell. In some cases the law treats you as having bought the home again, at its market value on the day you first used it to produce income. This page explains when that rule applies, how a valuer looks back to that day, and what to send us.

When does this rule apply?

Section 118-192 of the Income Tax Assessment Act 1997 applies when all of these are true:

It was your home. You lived in it as your main residence before it earned any income.
You first used it to produce income after 20 August 1996. That includes renting it out or using it for a business.
A later sale would only be partly exempt. Your accountant works this out.

When the rule applies, you are generally treated as having bought the home on the day it was first used to produce income, at its market value then. That value, rather than the price you originally paid, is then the starting point when your accountant works out the gain on a later sale.

The ATO’s guidance for this case is to get a market valuation of the home at that date. Conditions and exceptions apply, so your accountant confirms whether the rule applies to you and which date to use.

What about the six-year choice?

You may be able to keep treating a former home as your main residence for up to six years while it is rented. Whether you make that choice affects how the rules apply to you, so your accountant confirms the date before you request a valuation.

Once you have the date, the valuation itself works the same way: the home’s market value as it was on that day.

Can it be valued years after it was first rented?

Yes. The ATO’s guidance is to get a market valuation of your home when you first use it to produce income, and it says you can arrange one later if necessary. A retrospective valuation values the home as it was on the day, using sales of comparable properties from around that date, whenever the report is prepared.

Sooner is still easier. Records are easier to find, and the comparable sales are fresher, when the date is recent.

How the valuer looks back to that day

The home as it was. The land, the dwelling, its size and its condition on the day. A new kitchen, an extension or a subdivision since then is taken out of the picture.
Sales from around the date. Comparable homes that sold before and around the day, each adjusted for differences in land, building, condition and location, and for market movement to the date.
No hindsight. The ATO’s guide says the market is judged as it stood on the valuation date, not with the benefit of hindsight. A later price boom or rezoning that nobody could have known about on the day is left out.

How property is valued for CGT explains the method in more detail.

Desktop or inspected?

A home cannot be inspected as it was years ago, so records do much of the work either way. The Desktop CGT Valuation, $149 including GST, suits most standard homes and works from sales evidence and your records without a visit. The Inspected CGT Valuation, $495, adds a visit and suits unusual, renovated or higher-value homes, a recent date, or an accountant who wants an inspection.

Your accountant has the final say, and we tell you if we think an inspection suits your home better. If tenants live there now, they are entitled to notice before an inspection: the inspected valuation page sets out the notice periods.

What to send us

Records of the home as it was on the day do the work an inspection would. Send what you have:

something that shows when it was first rented, such as the first lease or the first rental listing
the lease and the rent at the time
photos from around the date, including any rental or sales listing
plans, building approvals and invoices for renovations or extensions, with dates, both before and after the date
the contract of sale and settlement statement from when you bought
for apartments and townhouses, strata records of any major works

If something cannot be found, the report states what the valuer has assumed. If your accountant asks for values at two dates, the second date goes in the same report for $149. Request your valuation in about two minutes, and see all fees on the pricing page.

Still own it on 30 June 2027?

That date may matter as well, under the new capital gains tax rules that start on 1 July 2027. A valuation at 30 June 2027 is prepared after the day. The law also allows for a government-set apportioning method as an alternative, but it has not been finalised yet. See 30 June 2027, where you can register your property free.

We value property. We do not give tax advice. Your accountant decides whether this rule applies to you and which date to use.