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22 April 2021

The Essential Retrospective Valuation Property Guide

Written by Tuan Duong
Founder & Director

If you’re selling your home or acquired property through inheritance, you’ll need to obtain a retrospective valuation property report. 

Yet, so many property investors and property owners are unaware that you need to know the current value of your property and the value on the day you acquired it. 

A retrospective property valuation provides an official valuation of a property’s market value at a certain point in time. 

We’ve put together this ultimate retrospective valuation property guide to help you establish when you might need one and how to get your hands on one. 

What Is a Retrospective Valuation Property Report?

Also known as a backdated historical property valuation, a retrospective property valuation indicates what the property was worth at a specific time in the past. 

The most common use of a retrospective valuation property report is identifying a property investor’s capital gains tax liability.

The Australian Tax Office (ATO) requires property investors to submit a capital gains tax property valuation report to establish the capital gain they may have made on the sale of their investment property.

As your capital gains tax liabilities will depend on the property’s increase in value from the time it was purchased or first used as an investment property to the time it is being sold, it may be necessary to conduct a retrospective valuation for CGT purposes - especially if you’re unsure whether the price in the original sale agreement was an accurate valuation. 

There are, however, other circumstances that may also require you to obtain a retrospective valuation property report, including: 

  • Separation from a spouse: for distribution purposes, the property’s value must be identified on the date of official separation. 
  • Inheritance of properties in a deceased individual’s estate: for distribution purposes, the value of the property must be identified on the date of the deceased individual’s death. 

How Do Property Valuers Conduct a Retrospective Valuation?

In completing a retrospective valuation property report, a Property Valuer will need to undertake a historical data analysis and a physical inspection. 

Historical Data Analysis 

An expert Property Valuer will access a database that contains historical market value data. Accessing this data will give the Valuer information about the market conditions when the property was initially purchased. 

Property values fluctuate regularly, so Property Valuers will generally perform extensive research into the market conditions over this time. These changes can significantly impact the current sale price and the historical valuation of a property.

To help produce an accurate property valuation report, a Property Valuer will also try to access the property’s original valuation. If there were any incorrect assumptions made in the initial valuation, there would likely be a change to the original valuation. 

When compiling the retrospective valuation property report, a Property will generally take the following considerations into account:

  • when the property was originally purchased (for example, was it bought in 1995 or 2010?);
  • how much the property was initially purchased for; 
  • whether the original purchase price was an accurate valuation based on the market conditions at the time; and 
  • any extensive renovations completed on the premises after the original purchase date, such as kitchen and bathroom renovations or room additions. 

Once a data analysis is complete, a Property Valuer will typically arrange a physical inspection of the property before finalising the retrospective valuation property report. 

Physical Inspection

A physical inspection allows the Property Valuer to gather substantial evidence to provide accurate property valuations. 

Physical inspections can have a significant influence on the overall value of the property because a Property Valuer will generally identify: 

  • the condition of the property; 
  • complex or hidden attributes that could not be established through data analysis; 
  • potential structural and pest issues; and
  • the surrounding area and available amenities. 

While a physical inspection is not always required, it gives the Property Valuer a good picture of details that would otherwise be overlooked.

Why Choose Duo Tax Property Valuers?

While a property appraisal is an informal valuation that is not legally enforceable, property valuations are legally enforceable reports and must be conducted by qualified and licensed valuers.

So, you’ll need an expert Property Valuer to produce a retrospective valuation property report for you. 

Our mission at Duo Tax has always been to help property investors save money where they can. So, in the spirit of this, we have assembled a team of expert Property Valuers to help you with all manners of property valuation.

With a nationwide presence, we provide a comprehensive suite of property valuation services across Australia to deliver reliable and affordable retrospective valuation property reports.

Key Takeaways

A retrospective valuation property report is a valuation of a property at a specific time in the past. 

There are various reasons you could need a retrospective valuation property report, including:

  • to identify a property investors capital gains tax liability; 
  • for distribution purposes in the case of spousal separation; and 
  • for distribution purposes in the case of inheritance. 

In each of the above instances, a retrospective valuation has a significant impact on an individual’s tax obligation, so it’s necessary to obtain a retrospective valuation property report from a certified Property Valuer. 

At Duo Tax, our team of experienced Property Valuers can provide backdated or historical valuations to assess a property’s value at a certain point in time.

To get the best possible advice on your valuation options and to enquire about our retrospective valuation property report, get in touch with us today.

Disclaimer: Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to property investors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek a second professional opinion for any legal or tax issues raised in your investing affairs.
Tuan Duong is an award winning Quantity Surveyor and leads Duo Tax Quantity Surveyors – Australia’s fastest growing provider of Tax Depreciation. Reach out to him directly on 0431 154 356 or email tuan@duotax.com.au
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