Why should I get a valuation on my IP again??

I recall reading etc that it is good to get a valuation done on ones IP.

Could someone enlighten me to the reasons / advantages for getting a valuation .... now
(i assume if i get it done now before DA approval, 'value' would be lower and advantageous if moving into trusts .... CGT savings....)

Scenario
- own IP that has been rented out.
- waiting to receive subdivision / planning permit / DA
- plan to demolish existing dwelling and build new townhouses
- plan to keep all new townhouses long term
- unsure of structure yet - but may move out of own name and place dwellings into trusts

 

You would only need a new valuation if you want to borrow more money against the property.

 

Hi Terry
I assume getting a valuation done to borrow more money is something the bank would do 'par the course' then... Rather than me needing to engage my own valuation....

 

You don't need to do your own val, the bank or your broker will take care of it for you.

 

Hiya

As Terry said - a valuation is only required when you're looking to borrow more.

If you want an idea of your properties current value ask your finance person for a desktop report.

Cheers

Jami

 

That would trigger a CGT event at market value. It would also refresh the CGT costbase for the land to that newer value. And it would be dutiable. These costs would need to be funded. If you are proposing that type of transfer then a valuation will be needed by OSR.

I would get tax and legal advice before doing that. The timing of the transfer also needs consideration as the ideal value to limit tax is a low end valuation where a lender val you may want it high end. Perhaps valued on different basis at different times
Good finance broker may recommend some strategies.

 

So mkt value - is determined by the OSR and not by a valuation i get done or the bank gets done.....?
waiting on my accountant who is doing some crunching - I guess thats what I'm trying to get my head around - valuation/s and timing for different basis ..... may involve 2 valuations and different time frames??

 

Not quite. OSR will ask for a val to support the transfer duty if its with a related party / associate. They have some basic rules about its date but yes you can use two vals at different times.

A common issue can be a transfer to a trust and the property is to be dev. Three or more vals are not unusual.
1. First transfer of whole site house and land to trust. Triggers CGT event etc. OST need the val for duty. Low end valn desirable.
2. Trust holds for a while (maybe years) then devs. New val used for margin scheme based on the best use of the land. High end valuation is desirable.
3. Val for finance when completed. Equity release / refinance purpose etc.

While it doesnt address OSR the ATO have a paper on valuations which confirms valuations can have different purposes. The highest and best use test is often ignored and can save tax !! :
Market valuation for tax purposes

 

cheers Paul