Property Valuation before Renting it out

Hi all :

Hope you guys are all doing fine. :)

I have got a question regarding valuation of property before renting it out. The place where I currently live is my PPOR. However I am planning to rent it out soon. I was told by many to make sure that I get the valuation of my property done before I rent it out in terms of implication on CGT, when I sell it later. I am giving an example.

Suppose I bought my property for 300K. Before renting it out, lets say my property is worth 360K. Then I sell the property after 4/5 years and let us consider it's worth 420K at that stage. So on the first 60K( 360K-300K), I will not be taxed at all. However for the last 60K( 420K-360K), I will be paying for the CGT.

So whats the best way to get this valuation done and by whom? I mean some official document which I can provide to ATO later.

Cheers!
 
Will you be moving into a new ppor or utilising the 6 year rule?

And i think they just aportion the time as a ppor/ip against the difference of cost base and selling price.

An expert will shed some light

Cheers
 
Hi all :

Hope you guys are all doing fine. :)

I have got a question regarding valuation of property before renting it out. The place where I currently live is my PPOR. However I am planning to rent it out soon. I was told by many to make sure that I get the valuation of my property done before I rent it out in terms of implication on CGT, when I sell it later. I am giving an example.

Suppose I bought my property for 300K. Before renting it out, lets say my property is worth 360K. Then I sell the property after 4/5 years and let us consider it's worth 420K at that stage. So on the first 60K( 360K-300K), I will not be taxed at all. However for the last 60K( 420K-360K), I will be paying for the CGT.

So whats the best way to get this valuation done and by whom? I mean some official document which I can provide to ATO later.

Cheers!
My understanding is that you do not need a formal valuation from a valuer - an appraisal from a licensed real estate agent will suffice. Your accountant can confirm this but we have conducted many of these appraisals fro our clients based on their accountants advice.

I would work with the agent that you choose to manage the property and have them conduct an appraisal to set the value base. More often than not appraisals are more optimistic than formal valuations, thus increasing the value and reducing your capital gains exposure upon sale.
 
Hi there :

Thanks for that. I think you mean free appraisals that we can get from real estate agents ?

Do they provide an official document for the appraisal?

Cheers!
 
Hi there :

Thanks for that. I think you mean free appraisals that we can get from real estate agents ?

Do they provide an official document for the appraisal?

Cheers!

Some will provide a letter on company stationary and others will provide a CMA (comparative market analysis).

I still believe a valuation from a licensed valuer will carry more weight. You can google licensed valuers and take your pick.

Cheers.
 
Yes - A free appraisal will suffice and it should be on their company letterhead as well. I have used this method on my own investment properties and have never experienced any issue with the ATO upon sale.
 
We got an appraisal from a licensed real estate agent for free. At the end of the day, you want this value to be as high as possible (and not conservative) to reduce your future CGT liability (if applicable). A licensed valuer or mortgage valuer may take a more conservative approach whereas a RE agent will be trying to get your business and give you a higher value.

Just my 2c.
 
We got an appraisal from a licensed real estate agent for free. At the end of the day, you want this value to be as high as possible (and not conservative) to reduce your future CGT liability (if applicable). A licensed valuer or mortgage valuer may take a more conservative approach whereas a RE agent will be trying to get your business and give you a higher value.

Just my 2c.

Check with the ATO and if they ok it, then sounds like a plan.
 
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