Who desides the value???

G'day all,

Just wondering, we purchased our (at the time) PPOR some 6 yrs back for about $250k. Then about 3 yrs ago we moved to the coast Into our new PPOR and have had tenants in our previous PPOR ever since. When we moved out of the place had a value of around $380k. Now not worth much more, maybe $400k max as things have certainly slowed. This is no issue as we are fine with the long term out look.

My issue is (im only a nofice here) speaking hypothetically if I sold the place today for $380k I should pay no CGT is that right? Or even if I sold it for $480k then I would only pay CGT on $100K is that correct? As it goes on the value of the place at the time it became an IP? If this is all correct WHO determines what it was worth when I moved out?

I think thats all clear enough. Pls let me know if more details are needed. We have no plans at all to sell the property but its more of a curiousity thing to be honest. And just want to know if there is something I need to sort out rather than in 10-15 yrs time say bugger that was ment to have been sorted yrs ago.

Thanks In advance
Jayro

I am under the impression that you need an official valuation when you move out, or at least 3 written quotes from agents then take the average (when you convert a PPOR to an IP).

Not sure what happens if you don't do this at the time, whether there are people out there who can certify the value of a particular property at a certain point in the past.

Better check with your accountant - the longer it goes on the harder it will be to sort out.

But then again I could be wrong.....
Marg

Jayro

A Registered Valuer will be able to give you a valuation for the property as at the time you moved out and the property became an IP. You will need this for CG purposes down the track (whether you sell or whether it eventually becomes a part of your estate) so, IMHO, it would be best to have this matter attended to sooner rather than later.

Cheers
LynnH

Ok thanks for the replies. So Lynn do I simply contact my agent to see if they could arange it or if they have a registered valuer they use or would it be a simple matter of picking one from the yellow pages for example in the local area and go about it that way? Also any idea of cost onvolved, ball park?

Thanks again

Jayro

Jayro

Personally, I would approach a valuer directly and let him know the purpose of your valuation - this is important, because the valuer will write the report differently for different purposes (e.g. a report for CGT purposes will look different from one which is done for the purposes of approaching the bank for a loan) There will be no difference in the valuation - just in the way the valuer's report is presented.

Your PM will need to be involved at some point to arrange with the tenants for the valuer to have access to the property. Costs vary with different areas - the last one I had done was $500 + GST.

May I suggest that, when the valuation is completed, you take it to your accountant -s/he will let you know what other documentation will be required in order to work out what CG will eventually be payable. That way, you can get receipts etc together in a folder now - much easier to do this 3 years after you have moved out, rather than trying to chase up all those 'pesky bits of paperwork' 15 or 20 years down the track!

Cheers
LynnH

ok, too easy. I will get that sorted this week. Im meeting my PM tomorrow afternoon for an inspection (I attend one each yr just for my own sake) so I will mention to her then that I will be arranging for this to happen and that she can expect to hear from a valuer.

Thank you very much for you help Lynn. Much appreciated.

Jayro

Glad I could help, Jayro!

Cheers
LynnH