Property Valuations for Family Transfers: CGT and Stamp Duty

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

Transferring property between family members, whether by gift, below-market sale, or trust distribution, triggers both capital gains tax and stamp duty obligations that require an independent property valuation. The ATO and state revenue offices treat non-arm’s length transfers as occurring at market value, regardless of what was actually paid. Without a professional valuation at the date of transfer, both parties risk incorrect CGT calculations and potential stamp duty reassessments.

This guide covers when and why a valuation is needed for family property transfers, the CGT events triggered, stamp duty treatment by state, and the specific documentation state revenue offices require.

Why family transfers require a valuation

When property is transferred between related parties (family members, associated entities, or connected persons), the ATO applies market value substitution rules. Under Section 116-30 of the ITAA 1997, if a CGT event involves no consideration, or consideration that is less than market value, and the parties are not dealing at arm’s length, the capital proceeds are taken to be the market value of the asset. This means the transferor is assessed on CGT as if they sold at market value, even if the transfer was a gift or a sale at a discounted price.

Similarly, state revenue offices calculate stamp duty on the higher of the consideration paid or the market value of the property. A transfer for $1 between family members still attracts stamp duty based on the property’s full market value.

An independent valuation establishes the market value for both purposes, providing a single defensible figure that satisfies both the ATO and the state revenue office.

Common family transfer scenarios

Gift of property to a child or family member

A gift triggers CGT event A1 for the transferor. The capital proceeds are deemed to be the property’s market value at the date of transfer. If the property has increased in value since the transferor acquired it, a capital gain arises, and CGT is payable even though no money changed hands. The recipient’s cost base is the market value at the date of transfer (since no consideration was paid).

Sale below market value

Selling property to a family member at a discount (for example, a parent selling their investment property to their child at a “family price”) does not reduce the CGT liability. The ATO deems the capital proceeds to be market value, not the discounted price. Stamp duty is also calculated on market value. The valuation protects both parties by establishing the correct figure for both calculations.

Transfer between spouses or de facto partners

Transfers between spouses during the relationship may qualify for CGT rollover relief under Section 126-5 of the ITAA 1997 (the spouse transfer rollover), which defers the CGT event until the receiving spouse disposes of the property. However, stamp duty varies by state, and some states offer duty concessions for spousal transfers while others do not. A valuation may still be needed for the stamp duty assessment even if CGT is rolled over.

Transfer into or out of a family trust

Distributing property from a trust to a beneficiary, or transferring property into a trust, triggers CGT and stamp duty. The market value at the date of transfer is required for both calculations. Trust distributions involving property are a common area of ATO scrutiny, and a professional valuation is essential evidence.

Transfer into an SMSF

Transferring business real property into an SMSF (via in-specie contribution) is a specific type of related party transfer with additional superannuation law requirements. The valuation must satisfy both the CGT regime and the SIS Act arm’s length requirements.

Stamp duty on family transfers by state

Most state revenue offices require the valuation to be dated within three months of the transfer date. If the valuation is older, the revenue office may request an updated assessment or apply its own valuation, which may not favour the transferor.

What the valuation report must include

For family transfer purposes, the valuation report should include the property’s correct legal description (lot and plan number, title reference), a description of the property including any improvements, the valuation methodology (comparable sales analysis, with at least three recent comparable sales), adjustments for differences between comparable properties and the subject, a clear conclusion on market value as at the specified date, and the valuer’s qualifications and independence statement.

State revenue offices are increasingly requiring detailed reports rather than brief letters of opinion. A one-page letter stating a value without supporting evidence may be rejected, resulting in the revenue office commissioning its own valuation at the transferor’s expense.

Transfers between family members outside a superannuation fund raise capital gains tax and stamp duty questions rather than fund compliance ones. Our sister brand CGT Valuations prepares related party transfer valuations for those transactions.