Capital Gains Tax Valuation
Protect Today’s Gains and Prepare for Tomorrow’s Tax
You have an investment property. It’s growing in value and providing you with a good income. Sure, you know that a day may eventually come when you want to sell it. But it’s probably OK to worry about Capital Gains Tax (CGT) when that time comes.
That could be a costly mistake.
Typically, the foundations of your future Capital Gains Tax are laid years before you sell or transfer ownership of your building. And, when you finally get to settlement, it’s usually too late to change the outcome.
And there’s more. With significant changes to CGT on the 1st of July 2027, understanding when and why a Capital Gains Tax valuation is required has never been more important. Or, to be honest, more time sensitive.
What Is a CGT Valuation?
Basically, a Capital Gains Tax property valuation is a formal assessment of your property’s market value on a particular date. It’s prepared to help calculate your Capital Gains Tax if and when a CGT event occurs.
Unlike selling a property on the open market, many CGT events don’t give you a market value. In these circumstances, the ATO needs the value of your property to be independently demonstrated, at the relevant date, to determine your capital gain or loss.
That’s where the CGT valuation is vital. It’s not what you think the property is worth, a bank valuation, a council rates notice, or a real estate agent’s opinion. It’s a powerful, defensible, and evidence-based assessment that’s prepared by a qualified valuer. And, it can stand up to ATO scrutiny if your return is reviewed.
When You Need a Property Valuation for Capital Gains Tax Purposes
Holding a Property Across the 1st July 2027
This is a new, and increasingly urgent, consideration. It applies even if you have no plans to sell, gift or transfer your property. Just owning an investment property on the 1st of July 2027 means a professional valuation is crucial. Why? Because the date is the dividing line between the old and new CGT rules.SEE MORE…
Turning Your Main Residence Into a Rental
If your main residence stops being your home and you use it to create rental income, you may need a valuation to find out its market value for future Capital Gains Tax purposes. That valuation is an important reference point when calculating your Capital Gains Tax if you then sell the property later.SEE MORE…
Transferring Property to Family or Friends
If you gift a property or sell it to someone you know for less than its worth, it’s not a clever way of avoiding CGT. The ATO applies CGT rules based on the property’s actual market value at transfer time. It doesn’t matter what money did or did not change hands. A professional valuation can protect both the transferor and the recipient. SEE MORE…
Inheriting a Property
When you inherit a property, your cost base isn’t what the deceased paid for it. Usually, it’s the property’s market value on the date they died. A valuation on that date is what establishes this figure, and it becomes the basis for any capital gain you’ll pay (or not if it’s a loss) when you sell.SEE MORE…
Moving Property Into or Out of an SMSF
Self-managed super funds have seriously strict rules about related-party transactions, especially where property is involved. Whether you’re putting a property into your SMSF or taking one out, it must happen at genuine market value. A qualified valuation is therefore required to keep your fund totally compliant.
SEE MORE…
Settling Property After Separation or Divorce
Transferring property between spouses as part of a settlement usually doesn’t trigger an immediate CGT liability. But, the property’s market value at the time of transfer still needs to be properly recorded. This is so the correct cost base carries forward to whoever ends up owning, and perhaps later, selling it.SEE MORE…
What Is a Retrospective Valuation for CGT?
Timing is Everything for Capital Gains Tax
A retrospective valuation, sometimes called a historical or backdated valuation, calculates what your property was worth on a particular date in the past.
It’s common for investment property owners to realise that they need a valuation after a CGT event has happened. Since your tax liability depends on how much your property has changed in value between two points in time, you need a reliable figure for what it was worth back then, not only what it’s worth today.
For example, you might need a retrospective CGT valuation if:
You converted your home into a rental property years ago – you need to establish your cost base as of the exact date it first made income.
You carried out substantial renovations – and you need those past building works professionally accounted for, alongside the valuation itself.
You inherited a property – and need to find out its true market value at the deceased’s date of passing.
The Washington Brown Retrospective Edge
At Washington Brown, our valuers use historical sales evidence, market data, and specialist valuation methods to determine what your property would reasonably have sold for at that exact point in time.
However, retrospective valuations become harder and more costly the further that you get from the event date. That’s particularly relevant if a property has been renovated, altered, or updated in the meantime.
Reconstructing an accurate historical picture years later demands more evidence, an increased amount of specialist work, and a longer time to complete than a valuation prepared close to the event date.
That’s why timing is crucial. The 1st of July 2027 is one of the most important valuation dates Australian property investors have faced. Arranging your valuation as close to that date as possible is likely to be simpler, more cost-effective and provide stronger evidence than attempting to reconstruct your property’s value years later.
How Depreciation Can Affect Your Capital Gains Tax
More and more savvy investment property owners are discovering that depreciation schedules can bring substantial tax deductions. But, what many don’t realise is that some of these deductions can also affect the amount of Capital Gains Tax they’ll pay when they sell.
This is because the ATO treats the types of depreciation differently. Some deductions lower your property’s cost base (the number used to calculate your capital gain), while others are dealt with separately.
How Different Depreciation Claims Affect CGT
- Division 43 (Capital Works) – these are the deductions claimed on your building’s structure, like the roof and brickwork. These deductions can reduce your property’s cost base, which affects how your capital gain is calculated if you sell.
- Division 40 (Plant & Equipment) – the deductions you claim for removable fixtures and fittings, like carpets and blinds. These are dealt with separately when the property is sold, and stay clear from your property’s cost base.
Since depreciation schedules and CGT valuations rely on an accurate grasp of your property’s history, improvements, and capital works, they naturally complement one another. And, of course, the more complete the picture is, the more reliable your future tax calculations and efficiencies will be.
“You can’t change tomorrow’s tax rules, but you can make sure you’re prepared for them”
– Tyron Hyde
Why the 1st of July 2027 Is Crucial for a Capital Gain Valuation
The Biggest Change to Capital Gains Tax in a Generation
For nearly 30 years, Australian property investors have enjoyed a 50 percent CGT discount, cutting their taxable gain in half when selling an investment property. From the 1st of July 2027, it’s gone. This means you’ll no longer receive the discount on future gains. Instead, you’ll now go onto a system that adjusts your property’s cost base for inflation, together with a statutory minimum 30 percent tax rate.SEE MORE…
Drawing a Line in the Sand for Your Gains
Thankfully, the new rules don’t take away the capital growth you’ve already made. The rules give you a cutoff point. Any capital gains that you’ve accumulated before the 1st of July 2027 are still allowable for the 50 percent CGT discount. Gains after that date will be under the new system. But, this means a serious challenge when you eventually sell: how do you prove exactly how much of your property’s growth occurred before the 1st of July, and how much afterwards? Without strong evidence, more of your gain could be pulled into the new post-2027 system than actually belongs there.SEE MORE…
Protecting Your Past Gains
A professional CGT valuation is critical, as it proves your property’s market value on the 1st of July 2027. That value is what will separate your pre-reform gains, still eligible for the 50 percent discount, from future gains assessed under the new indexation method. Of course, it’s possible to have a retrospective valuation done later. But by that point, you already know your property’s actual growth, and whether a higher or lower valuation on the 1st of July 2027 would work in your favour. And, a valuation prepared with that knowledge already in your hand could attract more scrutiny from the ATO, and may be harder to defend if it’s ever challenged. That’s why obtaining your valuation as close as possible to the 1st of July 2027 provides independent evidence of your property’s value at the vital point, giving you a strong foundation.SEE MORE…
The Washington Brown Advantage
At Washington Brown, our property valuers work closely with our quantity surveyors, evaluating both the market value and the building structure. This means your 1st of July 2027 cost base will be strong and complete. And most importantly, ensures you have an independent valuation available should it prove to be the more favourable calculation under the post-2027 CGT rules. SEE MORE…
1st July 2027 Capital Gains Rules at a Glance
If you fall into the third scenario, remember this:
A valuation doesn’t automatically mean less tax. But, it does give you a genuine choice. You don’t know how much your property will grow between the 1st of July 2027 and the day you sell. So, a valuation at least gives you the option to compare both calculations when that time comes.
Washington Brown Is Your Trusted CGT Valuation Specialist
In a complex investment property market, with shifting CGT discount rules, 1st July 2027 deadlines, and strict ATO requirements, you need an experienced and proactive specialist on your side.
At Washington Brown, we understand what’s at stake, delivering Capital Gains Tax valuation reports and depreciation schedules that work efficiently to protect your hard work and investments:
45+ years of expertise – supporting property investors since 1978.
Unique dual expertise – qualified valuers and quantity surveyors working seamlessly together for an additional level of property expertise and insight.
Professional accreditation – members of the Australian Institute of Quantity Surveyors (AIQS), registered tax agents, and qualified property valuation professionals.
Australia-wide coverage – local valuers with national experience across residential, commercial, and industrial property.
Future protection – helping establish the evidence you’ll rely on when your property’s future Capital Gains Tax position is eventually calculated.
100% ATO audit success – we’ve never failed an ATO audit in our history.
Retrospective valuation experts – reconstructing historical market data with unsurpassed precision.