Avoid penalties! Learn the importance of Property Valuation in Your Tax Reports
Different methods are used in valuing properties but the principles remain the same. The most appropriate valuation method must be used in order to determine the value that the market is willing to pay for the asset.
The meaning of market value, as used by valuers of real property in Australia, is the estimated amount or which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.
The ATO suggests the ‘highest and best use’ valuation method as the most appropriate for valuing real property. The ‘highest and best use’ method considers any possible or future use higher than the current use since the current use may not reflect the optimal value of the property.
Penalties await when valuations are not done correctly. In order to avoid these penalties, seek the help of a tax professional. Contact us by sending an email to firstname.lastname@example.org or call us at (08) 9301 2200.
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