Retrospective valuations: the dates already sitting in your client files

A retrospective valuation establishes market value at a nominated past date from the evidence that existed at that date. It is a normal and accepted approach, and it is how a large share of CGT cost bases are properly set. The problem is not that practices do not know this. It is that the dates sit in client files unmarked, and every year they sit there the evidence behind them gets thinner.

Four dates most files are carrying

The day a home was first rented out. Where a main residence is first used to produce income, the cost base is generally reset to its market value on that day. Clients remember the year, sometimes the month. Nobody obtained a valuation at the time because nobody was selling. When the property is eventually sold, that date is the cost base, and the only question is whether it is set from evidence or from a guess.

The date of death. Inherited property often takes its cost base from market value at the date of death, particularly for pre-CGT assets and dwellings that were the deceased’s main residence. Executors rarely commission a valuation unless the estate needs one for distribution. The beneficiary sells a decade later and the accountant is asked for a figure from a date nobody recorded.

The transfer to the trust, the SMSF or the children. Where property moves between related parties for no consideration or at a non-arm’s-length price, market value is substituted for the proceeds. The transfer went through at a nominal figure, the stamp duty was paid, and the CGT side was left for later. Later has a date on it.

The day pre-CGT status ended. A change in majority underlying ownership of a company or trust can convert a pre-CGT asset into a post-CGT one, with a cost base equal to market value at that time. It is frequently discovered years after the event, by which point the valuation date is already retrospective.

Add family law settlements, where a value at separation is needed for the property pool, and the list covers a meaningful fraction of any established client base.

What a retrospective valuation actually rests on

A properly prepared backdated property valuation is built from title and council records, dated aerial imagery, historical listings and sales that settled around the valuation date. Sales contracted after the date are used only as a cross-check on the trend, never as primary evidence. Dates within the last 25 years are routine. Older dates are possible where the records survive.

That last clause is the point. Records do not improve with time. Listing archives lapse, council files are culled, comparable sales fall out of the databases that hold them. A valuation date from 2019 is straightforward today. The same date in 2032 is harder, and a date from the early 2000s is already a research exercise.

Why the queue is about to get longer

From 1 July 2027 every CGT asset held by an individual, trust or partnership acquires a new valuation date, and the ATO has said a valuation for that date cannot be obtained before it. Every valuer in the country will be working from the same week of evidence for every client who wants one. Retrospective work for older dates will be competing for the same capacity.

A practice that clears its existing backlog in the next few months is ordering into a quiet market. A practice that discovers the backlog in 2028 is ordering into a crowded one, for dates that are a further year older.

Clearing the files

The process is not complicated. Pull the property ledger for every client with an investment property, an inherited property, a related-party transfer or a pre-CGT note. Flag each one where a valuation date has passed without a valuation. Order the reports. A retrospective property valuation is prepared from the evidence at the nominated date, delivered as a desktop report, and signed by the valuer who prepared it: a Chartered

Accountant, Registered Tax Agent (TPB 17532009) and Certified Property Valuer with the Australian Valuers Institute. Several properties can be placed on one instruction, and a past date costs the same as a current one.
The date has already passed. The only thing still moving is the evidence.