Like most property valuations, the average Australian may be unfamiliar with having a retrospective property valuation until they are asked to supply one. Despite this, a retrospective is one of the most common forms of property valuation. If you are in need of some retrospective valuation services but want to know what you’re in for, you’ve come to the right place. But first…
What is a retrospective property valuation?
A retrospective property valuation is a form of property valuation that is backdated to a specific date. That means the valuation of a property is not on the property’s current market value, but on its value as it stood at a date in the past.
When Do You Need a Retrospective Valuation?
A retrospective valuation is most needed for tax purposes, particularly Capital Gains Tax (CGT). A property investor that has acquired any property after the 20th of September 1985, will need a retrospective valuation to calculate their tax liabilities upon the sale of their property. In this scenario, you will need to provide a retrospective valuation of the property to demonstrate how the value of your property has increased since its original purchase.
Of course, this is not the only occasion retrospective property valuations may be required. Some of the other most common uses of a retrospective property valuation include:
- Handling a deceased estate
- Providing evidence of property value for divorce settlements
- Determining compensation for property damage
- Knowing the market value for related party transfers
A retrospective property valuation report is very common and can be made on several occasions for multiple dates if you so require.
How does a Valuer Conduct a Retrospective Property Valuation?
There are several ways a property valuer can conduct a valuation. When it comes to retrospective valuations there are two key elements to determining a property’s past value: market research and an inspection.
Market Research
An essential part of any property valuation is market research. A property valuer has access to a database that supplies information on the property at any point in time. From this database, they will be able to see how the market was at the time the valuation is set and will then proceed to analyse, calculate, and report in a similar manner to a current market property valuation. They will also adjust for inflation and take into consideration any findings from the inspection of the property.
Property Inspection
A property inspection is not always required for a valuation. Sometimes there is enough information in a valuer’s databases that allows them to complete a property valuation from their desktop. However, there are times when a database does not have sufficient information on a particular property and so a valuer will need to inspect the property for themselves to collect relevant information for themselves.
When conducting their property valuation, the valuer will have to take several things into consideration. This includes:
- The overall condition of the property
- Hidden structural issues that may have always existed
- Features and attributes missing from the databases
- Renovations or improvements that have been done to the property
- Architectural design of the property
- The property’s size, layout and land usage
- Any historical significance and the property’s landmark status
Sometimes a valuer can complete this inspection with the use of photos that may show the property as it was on a certain date. This can help if a property has had significant renovations completed and the photos can help provide the previous state of the property. As mentioned above, this may not be necessary. What a valuer needs and how they will conduct a valuation will depend on the available data and the purpose of the valuation.
Who can Conduct a Retrospective Property Valuation?
For any retrospective property valuation in Darwin, it is recommended to use a Certified Practising Valuer (CPV). This is a certification provided by the Australian Property Institute (API) and ensures that the valuer is educated, experienced and highly trained.
As a retrospective valuation is often needed in a formal capacity such as taxes and settlements, a property valuer will need to be independent and reputable. When choosing a valuer for a retrospective property valuation, make sure they are independent, certified, and experienced for the best outcome.