Capital Gains Tax Valuations
Why do you need Lee Property Valuers And Advisors?
Lee Property Valuers and Advisors is a fully licenced and accredited property valuation firm, dedicated to providing valuation and strategic advice for real property.
You may be entitled to claim the Principal Place of Residence Exemption. Your home and an area of 2 hectares (5 acres) is exempt from Capital Gains Tax.
We can provide a valuation assessment to determine the market value of your home and the land exempt from CGT liability. Our assessment can be at the present date, to apply to a current sale transaction, or retrospective, to apply to your original purchase of the property.
The valuation for CGT purposes may be vital in determining and calculating the correct amount owed to the Australian Tax Office.
An independent professional valuation assessment will assist in your claim to reduce your tax liability.
Capital Gains Tax applies to the sale of rural property in Australia
Complete our two minute Capital Gains Tax Checklist to ensure you’re ready to be successful.=
‘Did you know that CGT is one of the most expensive and hidden taxes in Australia…most homeowners on rural lifestyle properties don’t even know how it is calculated’
Case study
A client recently engaged Lee Property Valuers to undertake a valuation for CGT purposes.
Background:
- Confidential
- Land Size – 8 hectares (19.76 acres)
- Purchase price $1,000,000 – January 2015
- Sale price $4,000,000 – July 2022
The client engaged our services knowing that their property was a rural lifestyle holding with a significant amount of the property’s value being associated with their domestic buildings. As the property’s land area was greater than 2 hectares, their home and other improvements could be claimed as being exempt from CGT liability.
The valuation report provided by Lee Property included 4 different valuation assessments to help them reduce the potential CGT being owed to the ATO at tax time.
The valuations provided were as follows:
- Market value of the total property at the date of purchase = $1,000,000 (January 2015)
- Market value of the property on 2 hectares together with the main residence and outbuildings at the date of purchase being = $500,000 (January 2015)
- Market value of the total property at the date of sale = $4,000,000 (July 2022)
- Market value of the property on 2 hectares together with the main residence and outbuildings at the date of sale = $2,500,000 (July 2022)
By providing the 4 different valuation assessments undertaken on the subject property. The accountant was clearly able to identity and assess the capital gain from 2015 to 2022.
In this case the CGT assessment was calculated by the difference of the total market value and 2ha valuation in 2015 therefore being $500,000, followed by the difference with the 2022 valuations therefore being $4,000,000 less $2,500,000 equals $1,500,000. The capital gain from 2015 to 2022 is $1,000,000.
The client in this case was entitled to a 50% CGT discount on the land and therefore the capital gain was $500,000 which was included in their tax return.
The client was extremely satisfied with the high level of detail with each valuation assessment as they provided a full analysis of the market value, comparable sales, improvements at each date together with a market summary.
In this case if the owner had not engaged Lee Property to provide these assessments their CGT liability may have been assessed on a capital gain $1,000,000 higher than what they were successfully able to claim.
Please note each CGT assessments may vary depending on the sale price of the asset and any other purchase or sale within the financial year, together with the applicable marginal tax rate.
