CGT Property Valuations Australia: When You Need One and How It Works

By Mike Wilczynski, Certified Property Valuer and Chartered Accountant · Updated August 2026

A capital gains tax (CGT) property valuation determines the market value of a property at a specific point in time for the purpose of calculating a capital gain or loss under Australian tax law. It is one of the most common, and most consequential, property valuations an Australian property owner will ever need. Get the valuation right, and your CGT calculation is accurate and defensible. Get it wrong, or skip it entirely, and you risk overpaying tax by thousands of dollars, or facing ATO penalties for an unsupported cost base.

This guide explains every scenario that requires a CGT property valuation, what the ATO considers acceptable evidence, the difference between a desktop valuation and a full inspection, how retrospective valuations work for historical dates, and what it costs.

What is a CGT property valuation?

When you sell, transfer, gift, or otherwise dispose of a property that is not fully exempt from CGT, the ATO calculates your capital gain as the difference between the capital proceeds (sale price or market value) and the cost base (what you paid, plus eligible costs of ownership and improvements). A CGT property valuation is a professional, independent assessment of market value at a specific date that feeds into this calculation.

The valuation might be needed at the date of disposal (current valuation), or at a historical date such as when you first rented out your home, when a relative died, or when you transferred the property to a family member (retrospective valuation). The ATO requires the valuation to be based on objective and supportable evidence, prepared by a qualified independent valuer, and documented in a report that your accountant can rely on when lodging your return.

When do you need a CGT property valuation?

CGT valuations are triggered by specific events in a property’s lifecycle. Each event requires a valuation as at a particular date, and missing that valuation can create problems years later when the property is eventually sold.

Converting your home to a rental property

When you stop living in a property and start renting it out, Section 118-192 of the ITAA 1997 resets the cost base to market value at the date of first income-producing use. This is the single most common CGT valuation trigger in Australia, and the one most often missed. If you converted your home to a rental 5 or 10 years ago and never got a valuation, you need a retrospective valuation as at the conversion date before you sell.

Inheriting property (deceased estates)

When you inherit a property, the cost base depends on when the deceased acquired it. For pre-CGT properties (acquired before 20 September 1985), the cost base resets to market value at the date of death. For post-CGT properties, you generally inherit the deceased’s cost base, but there are exceptions where market value at date of death applies. In both cases, a date-of-death valuation may be needed when the property is eventually sold.

Transferring property between family members

Gifting property, selling below market value to a family member, or transferring property into a trust are all CGT events. The ATO treats non-arm’s length transfers as occurring at market value, regardless of what was actually paid. An independent valuation at the date of transfer establishes the market value for both CGT and stamp duty purposes.

Transferring property into an SMSF

An in-specie contribution of business real property into an SMSF triggers CGT for the contributing member. The disposal proceeds are the market value at the date of transfer, and the fund’s cost base is the same market value. An independent valuation at the transfer date satisfies both the CGT requirement and the SMSF compliance requirement.

Selling a pre-CGT property with post-CGT improvements

Properties acquired before 20 September 1985 are generally exempt from CGT. However, if substantial capital improvements were made after that date, those improvements may be treated as a separate CGT asset. A valuation may be needed to determine the proportion of the sale proceeds attributable to the pre-CGT land versus the post-CGT improvements.

Exceeding the six-year absence rule

If you rented out your former home for more than six years without moving back in, the main residence exemption expires for the period beyond six years. A valuation at the date of first rental use (or at the six-year mark, depending on your circumstances) establishes the cost base for calculating the partial CGT liability.

Selling an investment property

If you purchased the property at arm’s length and have clear records of the purchase price, you generally do not need a separate CGT valuation at sale. Your cost base is the purchase price plus eligible costs (stamp duty, legal fees, capital improvements). However, if your purchase records are incomplete, or if the property underwent a change of use during ownership, a valuation may be needed to establish or verify the cost base.

What the ATO expects from a CGT valuation

The ATO does not prescribe a specific valuation format, but it requires valuations to meet several standards:

• Independence: The valuer must have no personal or financial relationship with the property owner or any party to the transaction. Self-assessments, estimates from friends, and opinions from family members are not acceptable
• Qualifications: The ATO accepts valuations from qualified independent valuers, including Certified Property Valuers (CPVs), property valuation service providers (including online desktop services), and real estate agents who provide a detailed appraisal supported by comparable sales. However, for contested matters, a CPV report carries the most weight
• Documented methodology: The report must explain how the value was determined, including the comparable sales or income evidence used, any adjustments made, and a clear conclusion on market value as at the specified date
• Correct date: The valuation must be as at the specific date the CGT event occurred. A current-date valuation cannot be substituted for a historical date, and vice versa. If the event occurred in the past, a retrospective valuation is required

A single piece of evidence without supporting data, such as a brief letter from a real estate agent stating a value with no comparable sales analysis, is no longer considered sufficient by the ATO. The 2024 compliance crackdown on SMSF valuations signalled a broader tightening of valuation evidence standards across all asset classes.

Desktop valuations vs. full inspections

A desktop valuation assesses market value using comparable sales data, property databases, satellite imagery, and publicly available property information, without a physical site inspection. A full inspection valuation involves the valuer physically visiting the property.

	Desktop Valuation	Full Inspection
Cost	$245 residential / $550 commercial	$300-$600+ residential / $800-$2,000+ commercial
Turnaround	Same-day to 48 hours	5-10 business days
ATO accepted	Yes, for most standard properties	Yes
Best for	Standard residential and commercial properties in areas with sufficient comparable sales data	Unique properties, complex improvements, properties where the desktop data cannot adequately assess condition or features
Site visit required	No	Yes

For most CGT purposes, a desktop valuation provides sufficient evidence. The ATO explicitly accepts valuations from online property valuation service providers. A desktop valuation is also the only practical option for retrospective valuations (the valuer cannot inspect the property in its historical condition). Where the property has unusual characteristics, significant improvements not captured in public records, or is in a location with very limited comparable sales data, a full inspection may be more appropriate.

Retrospective valuations for historical dates

Most CGT valuations are retrospective, meaning they assess market value at a date in the past rather than today. This is because the CGT event (conversion to rental, date of death, date of transfer) has already occurred, and the valuation was either not obtained at the time or needs to be verified.

Retrospective valuations use comparable sales evidence from the relevant historical period, adjusted for the property’s characteristics as they existed at that date. Our retrospective desktop valuations are the same price as current-date valuations ($245 residential, $550 commercial) regardless of how far back the valuation date is. We prepare retrospective valuations going back decades, including to the pre-CGT date of 20 September 1985.

How a CGT valuation saves you money

The cost base directly determines the size of your capital gain, which determines how much CGT you pay. A higher cost base means a smaller gain and less tax. Here is a simplified example:

Scenario	Sale Price	Cost Base	Capital Gain (after 50% discount)	CGT at 37% marginal rate
No valuation (using original purchase price as cost base)	$950,000	$450,000	$250,000	$92,500
With valuation at conversion date (market value was $650,000)	$950,000	$650,000	$150,000	$55,500

In this example, a $245 desktop valuation saves $37,000 in CGT. This is not unusual for properties that were converted from main residence to rental during a period of price growth. The valuation pays for itself many times over.

Where the property is held outside a superannuation fund, the valuation is a capital gains tax matter rather than a fund compliance one. Our sister brand CGT Valuations prepares CGT property valuation reports for those cases, including retrospective effective dates.