What is a current market valuation?
A current market valuation is an independent assessment of a property's market value as at a current (or near-current) date, prepared by a Certified Practising Valuer to API Professional Practice Standards. It establishes the figure on which the ATO, an SMSF auditor or a Court can rely — independent of any contract price, related-party arrangement or agent estimate.
"Market value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction."
The market value substitution rule
Section 116-30 of the ITAA 1997 treats certain non-arm's-length transactions as if they occurred at market value, regardless of what the parties actually agreed. The Commissioner will substitute market value where:
- The parties are not dealing at arm's length (e.g. family members, related entities).
- There is no consideration paid (gifts, transfers to a discretionary trust).
- The consideration cannot be valued (e.g. an exchange of property).
- An asset is contributed in-specie to an SMSF.
- A property is moved between entities under a corporate or trust restructure.
Common scenarios we value
We complete current market valuations every week for these purposes:
- Transfer of property from a parent to an adult child (or vice versa).
- In-specie contribution of business real property to an SMSF.
- Family Court property settlements (Form 13 financial statements).
- Restructures involving discretionary trusts, companies or partnerships.
- GST margin scheme valuations on 1 July 2000.
- Pre-listing strategic valuations for vendors of high-value assets.
Contract price vs market value
Where a transaction is not arm's length, the contract price and market value can — and often do — differ materially. The table below summarises when each figure controls.
| Situation | Figure used by ATO | Action required |
|---|---|---|
| Arm's length sale | Contract price | None — contract is sufficient |
| Related-party transfer | Market value | Independent valuation |
| Gift / no consideration | Market value | Independent valuation |
| In-specie SMSF contribution | Market value | Independent valuation |
| Trust / company restructure | Market value | Independent valuation |
Our methodology
Every current market valuation involves a physical internal and external inspection, a detailed comparable sales analysis using the direct-comparison and (where relevant) capitalisation approaches, and a sworn statement of value. We document inspection date, sources, comparables, assumptions and limitations so the report stands up to scrutiny by the ATO, an SMSF auditor or a Court.
How it works — five steps
- 1
Brief & quote
Email the property address, the relevant date, and a short note on the purpose. We return a fixed-fee quote within 2 business hours for current market valuations.
- 2
Inspection
A Certified Practising Valuer (API) attends the property for an internal and external inspection. Tenanted properties are coordinated directly with the occupier.
- 3
Comparable sales analysis
We research settled sales using RP Data, Pricefinder, APM and council records, applying the direct-comparison and (where relevant) capitalisation approaches.
- 4
Report drafting
The report is drafted to API Professional Practice Standards and the ATO Market Valuation Practice Instruction (MVPI), with full comparable schedules and signed certification.
- 5
Delivery
The signed PDF is delivered to you and (on request) directly to your accountant, solicitor or auditor within 5 business days of inspection.
Glossary
Plain-English definitions of the terms used in this report and in related ATO guidance.
- Market value
- The estimated amount a willing buyer would pay a willing seller in an arm's-length transaction after proper marketing — IVS / API definition.
- Arm's length
- A transaction between unrelated parties acting in their own self-interest, free of any relationship that could influence the price.
- Section 116-30 ITAA 1997
- The market value substitution rule. Replaces the actual capital proceeds with market value where parties are not at arm's length or no/unvaluable consideration is given.
- In-specie contribution
- A contribution made to an SMSF in the form of an asset (such as business real property) rather than cash. Must be at market value.
- NALI
- Non-Arm's Length Income — taxed at 45% under s295-550 ITAA 1997. Triggered where an SMSF transacts with a related party at non-market terms.
- Form 13 (Family Court)
- The Family Court's financial statement; requires asset values supported by independent valuations where contested.