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The words in your accountant's email, explained.
Capital gains tax valuation has its own vocabulary. These are the terms that come up most often on our engagements, written for property owners rather than for the ATO.
Acquisition date
The date you became the owner for CGT purposes — usually contract date, not settlement. It sets the clock for the 12-month discount and determines whether the asset is pre- or post-CGT.
Apportionment
Splitting a gain between exempt and taxable periods or between parts of a property, such as a home partly used to produce income.
Australian Property Institute (API)
The professional body for Australian valuers. API membership and the CPV designation are the credentials the ATO and courts expect on a valuation report.
Capital proceeds
What you receive for the CGT event — normally the sale price, or the market value if the property changed hands for less than it was worth.
CGT event
The transaction or change of circumstance that triggers a capital gain or loss — most commonly a sale, but also gifts, transfers, and a property first being used to produce income.
Certified Practising Valuer (CPV)
An API-accredited valuer qualified to sign valuations relied on for taxation, litigation and compliance. Every report we issue is signed by one.
Cost base
What the asset is treated as having cost you: purchase price plus incidental costs, ownership costs and capital improvements. The gain is proceeds less cost base.
Date of death value
The market value of a property on the day its owner died. It becomes the cost base for beneficiaries where the property was the deceased's main residence or was acquired post-CGT.
Desktop & kerbside valuation
Assessments made without an internal inspection. Appropriate for some historical valuation dates, but a full inspection is preferred wherever the property is accessible.
Discount method
A 50% reduction of the capital gain available to individuals and trusts (one third for complying super funds) on assets held longer than 12 months.
Improvements
Capital works that add to the cost base — extensions, renovations, structural additions. Repairs and maintenance generally do not qualify.
Indexation method
An alternative to the discount method for assets acquired before 21 September 1999, indexing the cost base for inflation up to that date.
Main residence exemption
The exemption that removes CGT on your home. It can be full or partial, and a valuation is usually needed when the property stops being fully exempt.
Market value substitution rule
Where a property changes hands for no consideration or less than market value, the ATO substitutes market value for the actual amount — which is why an independent valuation is required.
Retrospective valuation
A market valuation as at a past date, built from sales evidence contemporaneous with that date rather than from today's market.
Six-year rule
Lets you continue treating a former home as your main residence for up to six years of income-producing use. A valuation at the date it was first rented sets the new cost base.
SIS Act regulation 8.02B
Requires SMSF assets to be reported at market value each year, supported by objective and supportable evidence that an auditor can review.
TR 2017/D7
The ATO draft ruling on apportionment and market value in property transactions. Our methodology and evidence standards are aligned to it.
Two-year rule (deceased estates)
An inherited main residence sold within two years of death is generally exempt from CGT. Beyond that window, a date-of-death valuation becomes essential.
Valuation date
The single date the report values the property at. Getting this date right is the most common thing accountants ask us to confirm before we start.
Still not sure which date applies?
Getting the valuation date wrong is the most expensive mistake in a CGT report. Tell us the history of the property and we'll confirm the date before you commit to anything.