What Is a Capital Gains Tax Valuation?
Capital Gains Tax, or CGT, is a tax levied on any profit you make from selling your property.
Most main residences or family homes (principal place of residence) are exempt from paying CGT; however, other properties such as investment properties, business premises and holiday homes are subject to capital gains tax.
You’ll need to report any gain you’ve made from the sale on your annual income tax return.
To do this, the Australian Taxation Office (ATO) requires you to submit a capital gains tax property valuation report.
A CGT property valuation report is used to determine the increase or decrease in the property’s value and calculate the taxable gain or capital loss.
You may choose to have a capital gains tax property valuation performed when you first purchase your investment property, or you may choose to have a retrospective CGT valuation conducted when you decide to sell the property.
In each of the circumstances mentioned above, capital gains tax valuations need to be completed by an experienced Certified Practising Valuer.
What Is a Retrospective Valuation?
Retrospective property valuations, for capital gains tax purposes, are used to calculate a property’s value at a specific time in the past.
As your CGT liabilities depend on the investment property’s increase in value from the time it was purchased to the time it is being sold, it will be necessary to conduct a retrospective capital gains tax property valuation – especially if you’re unsure whether the price in the original sale agreement was an accurate valuation.
Another example of where a retrospective capital gains tax property valuation would be used is if the investment property had extensive renovations completed and no record of those costs.
Because the renovation expenses can affect the current valuation figures compared to the original date, these changes must be taken into account.
How Do We Perform CGT Valuations?
To provide accurate capital gains tax valuations, our Duo Tax Property Valuers need to consider the investment property attributes to establish the current (or retrospective) fair market value, such as:
- property type
- size and build of the property
- location; and
- surrounding amenities such as nearby schools, public transport and shopping
Once the property attributes are considered, our Property Valuers will calculate the difference between how much you originally paid for the property and the fair market value you’ve sold your property for, for capital gains tax purposes.
We’ll then produce a valuation report that you can submit directly to the Australian Tax Office.
Why Choose Duo Tax Property Valuers?
Our mission at Duo Tax has always been to help property investors save money where they can.
We offer both existing and retrospective capital gains tax property valuations to help calculate the tax you pay on your property’s capital gain.