Join Australia's most dynamic and respected property investment community

Valuations for CGT

Discussion in 'Accounting & Tax' started by Bris Jay, 9th May, 2016.

Tags:
  1. Bris Jay

    Bris Jay Well-Known Member

    Joined:
    31st Jan, 2016
    Posts:
    50
    Location:
    Brisbane
    I'll have tenants moving into my former PPOR tomorrow and I've not had a formal valuation done yet. If I sell the property in the future and incur CGT, I assume that it will only apply to the increase in value from tomorrow.

    I am just wondering what is an acceptable form of proof of the current value? My bank valued at $700k but that would mean that I am achieving a yield of 4.83% on a large, near new house in Eight Mile Plains, Brisbane. If that were the case, I'd be buying as many as I could afford!

    My PM has advised that she is a licenced REA and that she will happily provide a market value estimate.

    Will that be sufficient proof to calculate CGT in the future or should I be engaging a licenced valuer?
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    If its free the answer is Yes. It does not need to be a formal valuers opinion and a agent opinion will suffice. Ideally it should reflect the upper end of the market range rather than the lower end.
     
    Terry_w likes this.
  3. Bris Jay

    Bris Jay Well-Known Member

    Joined:
    31st Jan, 2016
    Posts:
    50
    Location:
    Brisbane
    Thanks for that. I'd much rather save the $400 and the risk of a valuer going all conservative on me.
     
  4. hematite

    hematite Well-Known Member

    Joined:
    13th Jul, 2015
    Posts:
    75
    Location:
    Australia
    I thought a licenced valuer valuation was required? An agent could quote anything?

    I will need to do the same thing, but in retrospect...
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    Hopefully the agent will quote a high end opinion too. Seek a few agent quotes and keep the highest.;)
     
  6. MRO

    MRO Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    163
    Location:
    Perth
    I think the licensed valuer is just required for gst purposes if applicable. For cgt i dont think a valuation is required, you just need to have a reasonable basis for your calculation and an RE val is useful for that purpose.
     
  7. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    An apportionment is required and the ATO consider a valuer is required in the margin scheme rulings as an example.
     
  8. hematite

    hematite Well-Known Member

    Joined:
    13th Jul, 2015
    Posts:
    75
    Location:
    Australia
    My professional advice told me a registered valuer was required. It costs around $500, I guess not so much in the scheme of things...
     
  9. Ed Barton

    Ed Barton Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,129
    Location:
    Brisbane
    I stand to be corrected...

    A licenced valuer is not required. Just a reasonable arms length valuation.

    If the place is truly worth $500k and you get a REA mate to give you a $250k/$750k valuation then you might be in trouble if questioned. If the valuation comes in at $450k/$550k I don't think the ATO would notice.
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
  11. hematite

    hematite Well-Known Member

    Joined:
    13th Jul, 2015
    Posts:
    75
    Location:
    Australia
    Thank you Terry!
     
  12. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    2,976
    Location:
    Brisbane
    Agent will provide minimum of three comparable recent sales to support the valuation.