Accounting bodies are supporting formal valuations over the draft CGT apportioning formula released by the Treasury on August 4. The consultation closed on August 21, 2026, and the profession has begun to share its views publicly, emphasizing the need for accuracy in complex cases.
The IPA’s senior tax adviser, Tony Greco, clarified that a valuation does not need to be completed by June 30, 2027, but must reflect the asset’s market value as of that date. Greco pointed out that for assets with uneven growth, a formal valuation may be more advantageous, particularly if most growth occurred before July 1, 2027. He further noted that the apportioning method, still in draft form, requires careful consideration to ensure it aligns with the asset’s actual market performance.
Industry Bodies Share Insights
CPA Australia’s tax lead, Jenny Wong, acknowledged that the proposed formula could be a cost-effective option for straightforward cases. However, she warned that it might disadvantage Australians whose assets grew mostly before July 1, 2027, and then stabilized. Wong stressed that the formula’s fairness depends on its ability to reflect the reality of asset growth, which is often nonlinear.
Market Conditions and Valuations
Residential property markets have seldom experienced steady, even growth. While cities like Adelaide and Brisbane saw consistent growth from 2010 to 2020, other markets faced challenges like the GFC crash, the pandemic, and fluctuating interest rates, including the record low 0.10% cash rate. Additionally, rezoning windfalls in some suburbs contrasted with flat patches in others, sometimes within the same city. This variability shows the importance of assessing market stability before relying on the formula.
For complex assets or those held through market fluctuations, a formal valuation conducted by a qualified valuer remains the more dependable choice. The valuation must be dated July 1, 2027, as mandated by law, but its preparation and booking can occur beforehand or retrospectively. This flexibility allows taxpayers to plan effectively while ensuring compliance with legal requirements.
Practical Aspects
The Tax Reform No. 3 Bill, which includes related technical adjustments, is advancing through the same consultation period. Although the apportioning method is still in draft form, with no confirmation of changes post-consultation, the profession’s position is clear: formal valuations provide greater accuracy for complex assets. This stance is supported by the need to address the unique challenges posed by uneven growth and market volatility.
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