Capital Gains Tax Valuations

What is Capital Gains Tax (CGT)?

Capital Gains Tax (CGT) is a tax on the profit (or capital gain) made from the sale of an asset, including property. While CGT applies to a wide range of assets, property transactions are one of the most common scenarios where CGT comes into play. The amount of CGT owed is based on the difference between the property’s sale price and its original purchase price (or other relevant cost base), but the calculation can be complex, especially when factoring in any improvements made to the property or exemptions that may apply.

For residential properties, the family home (or “principal place of residence”) is generally exempt from CGT. However, if you are selling an investment property or a second home, CGT is usually payable. For commercial property sales, CGT is always applicable, and the tax can be significant depending on the value of the asset and the period of ownership.

In order to calculate the correct CGT, it’s critical to have an accurate valuation of your property at the relevant points in time—especially if you’ve inherited the property, received it as a gift, or made significant improvements. Northern Beaches Property Valuations provides professional CGT valuations to help you determine your property’s market value at the required dates, ensuring your tax calculations are accurate and compliant.

Why Do You Need a Capital Gains Tax Valuation?

There are several situations where a Capital Gains Tax valuation is required. These include:

• Property Sold After Inheritance: If you inherited a property and subsequently sold it, you will need a valuation at the date of inheritance to calculate the capital gain.
  
  
• Property Improvements: If significant improvements or renovations have been made to a property, an accurate valuation is necessary to account for these changes when calculating CGT.
  
  
• Gifted Property: If a property has been gifted or transferred between family members or related parties, a valuation at the time of transfer is required to determine its market value for CGT purposes.
  
  
• Investment Properties and Second Homes: For investment properties and second homes, CGT is payable on the sale. An accurate valuation at both the purchase date and sale date is needed to correctly assess the capital gain.
  
  
• Commercial Property: Commercial property transactions are always subject to CGT. Accurate valuations are essential for both the acquisition and sale dates to calculate the correct tax liability.
  
  

Having a professional, independent valuation ensures you are paying the correct amount of CGT and can significantly impact your tax liability, particularly in complex cases involving inheritance, gifting, or property improvements.

Our Capital Gains Tax Valuation Services

At Northern Beaches Property Valuations, we offer specialized CGT valuation services for both residential and commercial properties. Our certified valuers have extensive experience in the Northern Beaches property market and are equipped to handle all types of property valuations, ensuring accurate assessments that meet the requirements of the Australian Taxation Office (ATO).

1. Residential Capital Gains Tax Valuations

If you’re selling a residential investment property or a second home, CGT may be payable on the profit you make from the sale. To calculate your CGT liability, you’ll need an accurate valuation of the property at key dates, such as the acquisition date, improvement date, or the date of inheritance if applicable.

Our team at Northern Beaches Property Valuations provides comprehensive residential CGT valuations that consider all factors influencing the property’s market value, including location, size, condition, and any improvements or renovations made during the period of ownership.

2. Commercial Capital Gains Tax Valuations

Commercial property transactions can involve significant CGT liabilities, particularly if the property has been held for a long time or undergone substantial development. Accurate CGT valuations are essential for ensuring that both the acquisition cost and the sale price are correctly assessed, minimizing your tax liability and ensuring compliance with ATO regulations.

At Northern Beaches Property Valuations, we offer expert CGT valuations for all types of commercial properties, including retail spaces, office buildings, warehouses, and industrial sites. Our team has extensive experience in commercial property valuations, and we understand the complexities involved in determining the market value for CGT purposes.