The value on the day draws the line
For an asset bought before 1 July 2027 and sold after it, the total gain is split in two by the value on that date. The gain that built up to 1 July 2027 is treated under the current rules, with the 50 per cent discount applying. The gain after 1 July 2027 is treated under the new regime, with indexation and a minimum 30 per cent rate. The higher the value fixed on the day, the more of the total gain falls in the earlier, generally more favourable half, and the higher the base going forward.
These are announced measures, subject to the enabling legislation. Income support recipients are proposed to be exempt from the minimum rate. The tax position is confirmed by the client's accountant; we provide the property work and the valuation pathway beneath that advice.
A higher value on the day is worth real money
Because the value splits the gain, it is not a neutral measurement. A higher value at 1 July 2027 moves more of the gain into the half that keeps the 50 per cent discount, and lifts the base for the half taxed under the new regime. The same building, valued thinly or valued in full, leaves the client in two very different positions. And the lever to lift it is the same as everywhere else: rent reversion, a sensible upgrade and a better use, all argued and evidenced so a valuer can recognise the asset for what it really is.
A proper valuation, or the blunt default
Owners can fix the 1 July 2027 value in one of two ways: a proper valuation, or an Australian Taxation Office approximation formula based on growth rate and holding period. The formula is simple, but it is blunt. It captures none of the building's below market rents, its improvement potential or its best use. On a tired or improvable asset it often understates the value, and that lower number is fixed for good. A properly evidenced valuation, prepared early by an independent valuer with the full case behind it, is how the client gets the number right.
The default formula
- A mechanical estimate from growth rate and holding period
- Ignores below market rents and latent potential entirely
- Tends to understate an improvable or under rented asset
- The lower number is fixed as the dividing line, for good
A proper valuation, early
- An independent valuer in our ecosystem, engaged ahead of the queue
- Reflects highest and best use, not just today's income
- Rent reversion, lease review and a better use argued and evidenced
- A higher, defensible value that divides the gain in the client's favour
There are far more post 1985 owners than pre 1985 owners, and every one of them needs a value on the same day. As the date nears, the demand on good valuers only grows. Early movers are valued first.
Two stages, and a fee tied to the result
CASE?
rises
Value early, value well
The move is the same as for every owner affected by the date. Get an independent valuer engaged early. Use Stage 1 to build the case for the asset's real value, then bring our builders and fitout teams to deliver it, upgrading lobbies, common areas and bathrooms and introducing higher and better uses such as medical or allied health, so the valuer can fix a full and defensible figure at 1 July 2027 rather than leaving the client with the formula. Where works make sense, they need to be substantially complete by the date to count. An owner on their own cannot assemble a valuer, a delivery team and a repositioning strategy and execute it in time. The curated ecosystem is exactly that, ready to move. The full process, the fee schedule and the worked examples are available on request.