Can't find answer for accountant

S

Someday

Hi all, I was guided to this site by a friend (wish it had been earlier :))

Approx 16 months ago I sold a property in Victoria which I had bought 9 years earlier. The property had been tenanted from November 2006 as I had moved interstate.

My accountant is asking me what the property was worth the day the tenants moved in and I have no idea how to get this information. I have called the agent that both sold the property to me and also handled the sale, he was very non-committal to say the least.

Is there anywhere I can access this information?

I completely understand why the figure is required, I just don't know where to find it.

Thanks in advance
 
The information probably isn't available. Just come to an estimate figure. I'm sure it doesn't matter that much.
 
Actually interestingly enough, if you have a subscription to PDS Live pricefinder it is possible to do a backdated valuation by simply changing the <date of estimate> field. It will then go and find 6 comparable sales from that time.

However, for the OP, their only real option is the registered valuer one.
 
Thank you all so much.

The figure that I had estimated was roughly the same as the RE agent thought but he just wasn't interested now that the property is no longer mine :)

The property was refinanced approx 6 months prior to being tenanted, would the money lender still have a copy of the valuation that they did at the time and would this be helpful?

thanks again :)

Someday
 
Do you still have your rates notices from the period concerned? If you have the rates notice from 16 months ago and from 2006 you can calculate the movement between the two dates. Match the rateable value from 16 months ago to your sale value and then project the value back using the 2006 rate valuation. You need to document your methodology.

Regards
Paul
 
You would want to get as high a valuation as possible (with supporting sales evidence of course). I would be going back to the real estate agent or the company he works for. Asking for an estimate on there letterhead. Let them know the higher the valuation the better. A valuer will most probably come in low and cost you tax.
 
Exactly what I'm afraid of INXS.

I possibly have all of the rates notices but I have never understood the valuation on those pesky bits of paper...... I did cull a lot once the sale was finalised, I may have tossed it (if not they are in a very safe place amongst 9+ years of archiving :(

The accountant has also said that I can do something and make this property the rented property for the time and the rented property the main residence.... only worth doing if we don't think we will get a lot back on current property (I have no crystal ball)
 
"The accountant has also said that I can do something and make this property the rented property for the time and the rented property the main residence.... only worth doing if we don't think we will get a lot back on current property (I have no crystal ball)"

What the accountant was getting at is:

Notes:
(1) Assuming that you have not declared another place as your "main residence" (i.e your residential address for your yearly tax lodgements", then main residence exemption applies for up to 6 years from the date you leased out your property to the tenants (i.e up to November 2012). This effectively means that the capital gain that you made on that house not form part of your assessable income (tax free).

But, what it will mean, is that the for the current house that you are living in, main residence exemption wont apply for the overlap period from which the other place was deemed your main residence. So, when you sell your current house house in future, any "deemed" increase in value of your property for the overlap period, will form part of your assessable income.


However, if you have declared somewhere else as your main residence since leasing out the property, first option may not apply (I am not sure how stringent the tax office is on this).

Therefore, you will have a capital gain. In practice, there are two ways which the accountant can come to calculate your capital gains:

(1) Obtain valuation from date the house ceased to be your main residence, and calculate the difference between the proceeds received and the cost as at that time; OR
(2) Work out exactly when you bought your house and for what amount. And then work out a percentage over the 9 years that it was leased out for and multiply it by the net of proceeds and original cost to you.

Note, however, that method one, tends to work out best as you would be trying to obtain the highest valuation as at 2006 period - note, real estate agents should offer this service for about $200-300 dollars.


But yeah, if the accountant is confident that the ATO won't scrutinise the fact that you had somewhere else as your main resident, but want to apply the main residence exemption, then take his word for it (hopefully his been in the business for a while), because what this will mean for you is MORE money in your pocket NOW (you will have no tax until you sell the current house you are living in!).

Hope things were explained clearly.
 
Thank you hhse.... You have explained it very clearly. We have used the same accountant for the time we have been located here and he is with the largest firm in the area, of course this does not mean he knows 100% what he is doing IYKWIM (I am certainly not saying that accountants don't know what they are doing, more that no-one can really know all of the things required for such a complicated tax system) As we have been using our main residence for tax returns (and our tenant was using inv. prop. for her tax returns) I am concerned that this may lead to problems in the future...

Thanks again
 
Someday said:
Thank you all so much.

The figure that I had estimated was roughly the same as the RE agent thought but he just wasn't interested now that the property is no longer mine :)

The property was refinanced approx 6 months prior to being tenanted, would the money lender still have a copy of the valuation that they did at the time and would this be helpful?

thanks again :)

Someday
Click to expand...

Wouldn't the valuation from 6 months prior to it being leased out be a reasonable guide/acceptable to the tax office?

As for valuations, would the tax office require an independent Valuer our Would an real estate Val be enough?
 
hhse said:
Therefore, you will have a capital gain. In practice, there are two ways which the accountant can come to calculate your capital gains:

(1) Obtain valuation from date the house ceased to be your main residence, and calculate the difference between the proceeds received and the cost as at that time; OR
(2) Work out exactly when you bought your house and for what amount. And then work out a percentage over the 9 years that it was leased out for and multiply it by the net of proceeds and original cost to you.

Note, however, that method one, tends to work out best as you would be trying to obtain the highest valuation as at 2006 period - note, real estate agents should offer this service for about $200-300 dollars.


.
Click to expand...

There are 2 ways to calculate CGT but there is no choice in which to use.

Method 1 is used when renting a former PPOR out and method 2 is used when moving into a rental property.
 
Terry_w said:
There are 2 ways to calculate CGT but there is no choice in which to use.

Method 1 is used when renting a former PPOR out and method 2 is used when moving into a rental property.
Click to expand...

Terry, I/we purchased the property in 2001, I leased it out in 2006 and I sold it in 2011. Which of the 2 methods does this require me to use?

Thanks

Penny
 
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