Quick answer
The ATO expects a tax-purpose valuation to be specific to the provision it serves, prepared by a suitably qualified valuer, built on a recognised methodology and credible evidence, and documented well enough that the process can be replicated. In practice: a named valuer, a stated effective date, comparable sales, methodology, assumptions and a signed certification.
Eight components of a defensible report
Every report we issue contains all eight. A report missing any of them is the sort we are later asked to replace.
- Identification of the valuer, their qualifications, registration and professional body membership.
- A clear statement of the instructing party, the purpose of the valuation and the party entitled to rely on it.
- The effective date, stated separately from the date of inspection and the date of the report.
- Property identification: title particulars, land area, improvements, zoning and permitted use.
- The inspection undertaken, its date and its extent, with a photographic record.
- A schedule of comparable sales with full addresses, sale dates, prices and the adjustments applied to each.
- The valuation methodology, stated and reasoned — direct comparison, capitalisation, summation, or a combination.
- A signed certification, with assumptions and limiting conditions set out plainly.
What makes comparable evidence credible
The comparable sales schedule is the part of the report a reviewer scrutinises first. Credible evidence is settled rather than advertised, close in date to the effective date, drawn from the same locality and value bracket, and adjusted transparently for the differences that matter.
A schedule of three sales from the same street in the same quarter is stronger than a schedule of twelve sales spread across a region and two years. We would rather explain a small evidence set honestly than pad it.
- Settled sales, not listings or withdrawn campaigns.
- Within a reasonable window of the effective date — tighter in a volatile market.
- Same locality, same broad property type, comparable land area.
- Adjustments stated and reasoned, not applied silently.
- Any unusual sale — related party, mortgagee, distressed — identified as such or excluded.
Four reasons reports get questioned
In matters where we are engaged to review or replace an existing report, these are the recurring faults.
Common defects and their consequence
The extra burden on retrospective reports
A retrospective valuation carries everything above plus an account of how the property’s condition at the effective date was established. Where the property has since been renovated, cleared or sold, that account is the difference between a defensible report and an assertion.
We rely on council records, planning approvals, historical aerial photography, original contracts, prior valuations and owner photographs — and we state which of them we had and which we did not.
Questions we are asked about this
Will the ATO tell me in advance whether a report is acceptable?
No. The Commissioner does not pre-approve valuations. Acceptance is judged if and when the position is examined, which is why the report must be built to withstand review from the outset.
Does a more expensive report get accepted more readily?
No. What matters is that a qualified valuer inspected the property, researched real evidence and documented the reasoning. Complexity of the property, not the fee, drives how much work that takes.
Can the ATO substitute its own valuation?
The Commissioner can and does obtain independent valuations in disputed matters. A well-evidenced report narrows the gap and is the strongest position from which to negotiate or object.
Keep reading
Sources
- Market valuation for tax purposes — Australian Taxation Office — the eight valuation fundamentals
- Income Tax Assessment Act 1997 — Consolidated Act, AustLII
- Australian Property Institute — Professional Practice Standards and the CPV designation
This page is general information about how valuations are used for tax purposes. It is not tax advice. Your accountant or tax agent should confirm which provision applies to your circumstances.
Written and reviewed by
Jarrad Khoury
Head of Valuations at Asset Valuations Group, where he leads the Business Valuation Services division. Over 10 years in property and business valuation. Registered Valuer in Queensland (Not Limited), Licensed Valuer in Western Australia (Not Limited), CPV through the Australian Property Institute (Not Limited), CPV and CBV through the Australian Valuers Institute, and Registered Business Valuer through the AIBB.
Last reviewed 15 September 2026 · About the practice · Editorial policy