How to determine "Market Value" of the property?

[msapples]

Hi All,

Another question. Suppose I want to "sell" my property to my Family Trust.
Per SRO Vic requirements, I have to pay stamp duty on the sale price or market value (whichever is greater). In this case, I would need to use the Market Value.

But how is the Market Value of my property determined?

Do I just get my bank to do a valuation on it or an independent valuer to estimate the property value so that it's available in writing; or is it sufficient just to go to www.realestate.com.au and print evidence of comparable properties to determine the Market Value of my property?

I'm just wondering, what would the SRO consider evidence for "Market Value"?

 

[wylie]

My parents have transferred houses into a family trust, and we are about to do another transfer. In Queensland all we need is a real estate agent to give us an appraisal with three recent comparables.

 

[Peterw]

Wylie, my recent experience in Qld was, we needed, 3 agents and yes each with 3 comparables (they may be the same comparables).
Msapples, if you contact the relevant Vic department, they will give you their requirements. Good luck.

 

[wylie]

Wylie, my recent experience in Qld was, we needed, 3 agents and yes each with 3 comparables (they may be the same comparables).
Msapples, if you contact the relevant Vic department, they will give you their requirements. Good luck.

This is interesting. The houses that have gone over into the trust (last one was 2008/09 financial year I think) we needed three very recent comparable sales, but I am fairly sure that we had only one agent do the appraisal (but I could have that wrong, and we may have had a second appraisal). I had better check, because we are moving a house into the trust very soon.

Peter, did the three agents give similar appraisals? What if one appraisal is $500K, one is $550K and one is $600K?

I think we had best check with OSR to see if our one agent (three comparables) is enough. I was surprised (to be honest) that we didn't need a professional valuer to value for payment of stamp duty when we first started moving houses.

 

[Rolf Latham]

CBA will do a market val for 150 bucks for most properties

cheap mitigation against the possible state OSRs who seem to be very hungry

ta

rolf

 

[Experimentee]

In Victoria all the SRO need is one appraisal from a real estate agent.

 

[msapples]

Thanks guys.

I've contacted the SRO Vic to clarify on this and will revert.

 

[Peterw]

Wylie, my transfer was in 2005 or 2006. Perhaps it was either me or my solicitor being a bit anal, and not wanting a later issue. Knowing a few agents, getting the letters was not difficult. If pays to check with the department at all times, to be up to date. I still believe this may vary state by state.

 

[Jacque]

CBA will do a market val for 150 bucks for most properties

cheap mitigation against the possible state OSRs who seem to be very hungry

ta

rolf

I wasn't aware of this- thanks Rolf. Cheaper than hiring an independent valuer and I'm sure the SRO would consider it over an agents appraisal.

 

[lura]

Real Estate agents appraisals mean nothing. I've had this debate with a few people over the years - valuers, brokers...banks.

Apparently, you need to be qualified...so I agree $150 is cheap to get a proper valuation done.

 

[wylie]

Real Estate agents appraisals mean nothing.

It is enough though for paying stamp duty to OSR for transferring houses into the trust (unless it has changed recently) as long as the agent has provided three recent (three months?) comparables.

Perhaps it is because even if it wrong (or if someone does something dodgy), that value forms the new cost base, off which the next lot of capital gains tax is worked? So OSR doesn't really miss out.

And, of course, valuers apparently call up the local agents anyway (or used to).

I'm surprised really that it is allowed. I plan on double checking before we make the next transfer.

 

[Peterw]

Lura, I think your debates have been when the appraisal is tried to be used to get a loan from a bank, and yes the bank say, no way. In Qld when transferring for one person to another, and the transaction is not considered "arms lengtht" then the Office of State Revenue, will accept letters of opinion of current market value from real estate agents, as Wylie said, as long as they list 3 comparables inthe comparison letter. I cannot recall, wheter it wasbe being cautious, when transferring to my wife, I got 3 letters, from 3 agents, each with 3 comparables (a couple of comparables were the same) and it sailed through. The settlement, was 4 years after the date of the contract, so I did not want any hiccups.