Property valuation was only done by bank prior to renting out.

Hi there

When I was young and clueless I lived in my property for 3 years and moved overseas. I rented property out but didn't know at the time to get a property valuation. I have since done the same with my second investment property as I was silly and never thought to get financial advise. It is only through my research now that I have discovered that I should have done this. The banks however have done property valuations on both properties (which they own the valuations) several times to fund our PPOR. I could slap myself silly. When I go to sell my IPs would I be able to use the banks valuations if they agreed to somehow provide them or sell them to me (? Wishful thinking). I know the answer to this question will not be in my favour but I'm hoping there is a glimmer of hope for my previous ignorance

 

I have to add that we cannot move back into the investment properties due to location and already have a PPOR which we can't move out of.

 

A valuer can value a properties value in the past. They are not limited to current value.

 

Oh thank you! So all is not lost?

 

No, but if you have undertaken any renovations or extensions to the property you will need to provide evidence to the valuer as to what was done and when.

They should be able to “unwind” the impact of these changes.

 

Also you would want a valuation as high as possible at the date the income producing started, so using a lender's conservative valuation may not be ideal.

 

Thank you so much for your replies. It has been very helpful!!

 

I am in the same scenario so don't feel too bad.

 

Vals are easy to obtain...Issue is cost. Where if you had asked the agent back then it would have been ok and free. And before someone asks - Can I get a real estate agents opinon now ...No. They wont have the capacity now to go back and appraise a past value. I just arranged one for an offshore client and with the correct briefing its no problem. Shop around for valuers as prices vary

 

Why wouldnt an agent have capacity to go back and give an estimate of market value in the past ? Corelogic and a few others provide past sales history and comparable sales going back many years. Why would this not comply if it was a reasonable estimate at that time ?

 

Just hire a valuer for the times you can prove you were there or not there.

 

The relevant period will be when the property first became income producing.

 

https://www.ato.gov.au/general/capital-gains-tax/in-detail/market-valuations/market-valuation-for-t

That view says....Depending on the situation, a market valuation may be undertaken by a:

• registered valuer
• member of a recognised professional valuation body
• director, for balance sheet purposes
• person without formal valuation qualifications whose assessment is based on reasonably objective and supportable data.

A real estate agent without valuation qualification provides no better assessment than perhaps a Google sourced history without objectives data. Or a guesstimate or a taxpayer using data for which they may lack supportive purpose...A punt?

A backdated report by a unqualified person is not unlike a backdated trust deed. Dubious. Perhaps.

 

• person without formal valuation qualifications whose assessment is based on reasonably objective and supportable data.

That sounds like a real estate agent using corelogic data.

Nothing like a backdated trust deed. Thats illegal. A valuation based on reasonably objective and supportable data is legal and within the ATOs own guidelines.

 

But a agent opinion is a one page number. A valuer will list the objective data. Thats the relevant difference. Agent opinions need that data. REAs are not allowed to act as valuers unless qualified

You have seen the difference between a appraisal by agents and a valuation with data

 

yes i do agree with you that a professional valuation would be much better than a REA reasonable estimate. it would also lead to less arguments with the ATO.

if you obtained an REA estimate however and had supporting reasons and the ATO argued a different figure you would be entitled to a reduction and/or remission of penalties and interest as you have taken reasonable measures to obtain the market value. A professional valuation just makes any argument go away or at least minimise the risk of the ATO arguing the figure isn't correct.

However despite all that. It is allowed. But I would be like you and advise the most conservative approach but if a client said no they didnt want to incur the cost I would just outline the risk and would be quite content using that figure for market valuation as it is allowed and I'm not breaching the guidelines provided by the ATO themselves so im not assisting a taxpayer in doing anything wrong.

 

I am renting out our PPOR after 6 months of purchase. Can I use the purchase price as the valuation mark for future CGT purposes (given only a short time passed), or I should still obtain a new one? Thanks for opinions.

 

The law stipulates the value at the time rented out.

 

Thanks Terry for a good clarification.

 

I moved out my apartment in 2010, and turned it into an investment property. I ustj bought a house this month, and want to sell the investment property. Should I get valuer to value the apartment to the date I moved out or to the date 6 years after I moved out? There is a big price jump between 2010 and 2016, but not much after 2016, so I hope I can get it value to 2016 as the cost base.