Login
ATO warns investors over inflated property valuations in Big Brother tax crackdown
Property investors face heightened ATO scrutiny ahead of next July’s CGT discount changes, with the regulator targeting inflated valuations designed to avoid the full sting of the reforms.
Australia’s tax regulator is increasing its scrutiny of investors ahead of the capital gains tax (CGT) discount reforms coming into effect, watching out for inflated valuations designed to evade the impact of the changes.
The new settings will replace the 50 per cent CGT discount and impose a 30 per cent minimum tax rate on capital gains accruing from 1 July 2027.
Gains accrued up to 30 June 2027 will retain the 50 per cent CGT discount, while those accrued after that date will apply to applicable properties under the new settings.
An Australian Tax Office (ATO) spokesperson said that deliberately inflating a valuation to take advantage of the pre-existing discount to reduce tax was “not acceptable" and “may attract compliance scrutiny”.
“Taxpayers are required to determine and support the market value of their assets in accordance with tax law,” the ATO told SPI.
While not all investors are required to have their property valued professionally, the regulator said all taxpayers should ensure their valuations were supportable, replicable and based on appropriate evidence.
“Valuations undertaken by professional valuers are generally more credible than those provided by someone who isn’t a professional valuer,” it said.
The body said it would assess a valuation’s validity based on the asset type, the methodology used, and the evidence supporting it.
For property, the regulator said that only professionals licensed under the relevant state, territory or Commonwealth legislation can conduct a valuation.
“We will provide additional guidance before 1 July 2027 on how taxpayers can comply with their market value obligations,” it said.
The ATO said it would inform taxpayers how to determine the market value of certain assets, which professionals can conduct a valuation, and what documentation must be kept as evidence.
“As with all significant tax changes, the ATO will monitor emerging risks and taxpayer behaviour and will take appropriate action where it identifies arrangements or positions that are not consistent with the law,” it said.
Free investor loan check
Better property decisions start with smarter lending.
A free 15-minute finance check for property investors.
What are your lending goals?
Choose a goal to request a callback.
Ready to talk?
Book a 15-minute call →Finni Pty Ltd · Australian Credit Licence 384324 · Privacy
Want to see more stories from trusted news sources?
Make Smart Property Investment a preferred news source on Google.
Click here to add Smart Property Investment as a preferred news source.