Getting house valued for CGT purposes

PPJ

Hi all,

I am moving to Oz and thinking of letting out my house for a while, till I decide whether to make the move permanent. I will have to pay CGT in Oz on any gain in value on the property.

I would like to get an accurate and "official" valuation before I go. Any ideas how I can get this?

Thanks in advance.

PPJ

benood

Ask an estate agent to do one for you - you should say if you want a high or low value - make sure you have him send a letter to you. This will give a good marker against which the revenue would have trouble arguing at a future date - I don't think you will be able to get a binding valuation done.

PPJ

benood wrote:

Ask an estate agent to do one for you ....

Sorry - I should have said - I already have a range of estage agents' valuations, but I believe these are near to meaningless in any official capacity. I actually want to get a valuation that would be recognised for tax purposes. I am willing to pay for it, within reason.

Another related question: If I were to sell my property some years down the line, in the absence of any past valuation, how would the past value of a property be assessed? Is there some official index which is used?

benood

I think an agent's valuation will be pretty reasonable evidence in years to come - after all the tax man can't go back in time and come up with a better number.

All disputes like this go to the district valuer and he will apply tables to any hard values he has ie the land registry transactions or a march 1982 base case (which you could argue with anyway) - but if you can supply evidence to refute his opinion you've got a good chance of winning, it will be useful to have a range of valuations - you can use the ones which support the lowest tax bill! Other useful evidence can be anything - like terminal 6 was being built next door at the time. This fluidity can help you out, but does make it difficult to have certainty - but since you don't know what you'll ultimately sell the place for does this really matter?

RabbitMad

PPJ,

I don't understand your question. To which government will you have to pay CGT too? UK or OZ. If it is UK, a valuation at this point in time is meaningless. You will pay CGT on the proportion of the gain for the time the property was let (or available to let) minus 3 years minus £40,000.

So if you sell in the next 3 years no CGT to pay. If you sell after that you work out the gain from the purchase price divide by the number of months of ownership and then multiply this monthly figure by (the number of months its been let minus 36) to get the amount liable to cgt. Minus 40K off this amount and you have the amount you need to pay cgt on minus any other applicible allowances.

PPJ

RabbitMad wrote:

PPJ,

I don't understand your question. To which government will you have to pay CGT too? UK or OZ.

Oz. I will be an Australian resident for tax purposes. So any tax will be payable to the Australian tax system. The UK rules are not relevant.

On the other hand, if I decide to come back, I'll move back in to the house. In that case, I won't be selling, so again the UK rules will be irrelevant.

I'm really just interested in the issue of valuation.