When Do You Need an Independent Property Valuation?

An independent property valuation is worth having whenever someone other than you will rely on a property’s value and no arm’s length sale has set it: a transfer within a family, a home first rented out, an estate, a self-managed super fund or a separation. In some cases, such as a transfer between relatives in New South Wales or the ACT, the revenue office asks for evidence of value; for a rough idea of value, an online estimate or an agent’s appraisal is usually enough.

The test is simple. If the figure will be checked by a revenue office, the ATO, an auditor, a court or the other side, you want evidence rather than an opinion.

Which situations call for an independent valuation?

The sections below explain the cases where the rules are most specific.

Do you need a valuation to transfer property to a family member?

You may be asked for evidence of value, depending on the state or territory. In Victoria and the ACT it is expected for related-party transfers, and New South Wales usually asks for it. In New South Wales, Victoria and the ACT, duty is charged on the greater of the price and the property’s value, so a gift or a cheap sale to family is still taxed on what the property is worth. Each sets its own rules on evidence:

Exemptions and concessions, such as some transfers between spouses, differ in each state and territory, so check the position with your conveyancer or lawyer.

The same transfer often matters for capital gains tax too. Where you and the buyer are not dealing at arm’s length and the price is more or less than market value, the tax law uses market value instead (section 116-30 of the Income Tax Assessment Act 1997). One valuation at the date of transfer can cover both, if you tell the valuer about both purposes at the start.

When is a valuation used for tax and super?

Capital gains tax uses market value where a price is missing or does not count: a home first rented out after 20 August 1996 in some circumstances, inherited property in some cases, gifts and other transfers not at arm’s length, such as a sale to family for more or less than market value, and property held across 30 June 2027 if you choose market value over the apportioning method. The ATO says valuations by professional valuers are more credible than those by someone who is not one. How property is valued for capital gains tax explains each case.

Self-managed super funds must report their assets at market value every year, and the fund auditor checks the evidence. The ATO’s guidelines do not require a qualified independent valuer for the fund’s accounts, but say trustees should consider one where a property is a large share of the fund or complex to value. Property acquired from a related party must, in general, be business real property acquired at market value.

Do executors need a property valuation?

It depends on the estate and what happens to the property. The estate’s lawyer can tell you what the probate application in your state or territory asks for. A date of death valuation is useful when:

• one beneficiary keeps the property and the others are paid out, so the split is fair
• the property will be sold later and its market value at the date of death sets a beneficiary’s cost base, which applies in some cases
• beneficiaries disagree about what the property is worth.

Do you need a valuation when you separate?

Not if you and your former partner agree on the value. If you cannot agree, an independent valuation is the usual way through. If the matter goes to court, the court’s rules prefer, where practicable, a single expert jointly instructed by both parties (Part 7.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021). See property valuations for family law.

When don’t you need an independent valuation?

• Getting a loan. When you borrow, the lender arranges its own valuation. Valuations for lending are ordered by the lender, and we do not provide them.
• Setting an asking price. An agent’s appraisal is usually enough for this. Read the difference.
• Insurance. Building insurance covers the buildings, while market value also includes the land, so a market valuation answers a different question. Check with your insurer how your sum insured is set.
• A sale between strangers at an agreed price. Revenue offices generally accept the price where unrelated parties deal at arm’s length.
• Curiosity. Online estimates are free. They come from automated models with no valuer involved, so they are not valuations.

What makes a valuation independent?

Independence is about the valuer, not the label on the report. The ATO expects you to be able to show that you set out the scope and purpose, acknowledged the valuer’s independence to draw conclusions, and stated that the fee does not depend on the outcome. In practice that means:

• the valuer has no interest in the property or the result, and is not the agent selling it
• the instructions are in writing
• the report states its purpose, the valuation date and the basis of value
• the fee is fixed before the work starts.

A desktop assessment and an inspected valuation can both be independent. The difference is the evidence, and where a revenue office or court relies on the figure it may ask for an inspection. Request a valuation and tell us the purpose: the quote flow recommends a report, and we confirm the fee and the timing in writing before anything is booked or charged.