Owners face a key tax choice before 1 July 2027
Around 2.5 million Australian investment properties could need a property-specific valuation before capital gains tax changes start on 1 July 2027, according to Opteon.
That estimate includes about 2.3 million residential properties and 250,000 commercial and agribusiness properties. The value of a property at the transition date could affect how future CGT is calculated.
Opteon managing director for Australia and New Zealand Scott Chapman said owners should check their position early rather than wait until the rules begin.
“The ATO method applies a standard formula across the period you’ve owned the property, but property values don’t grow evenly year to year,” Chapman said.
For some owners, that formula may allocate too much of the gain to the period after 1 July 2027. Chapman said that risk is higher when a property recorded most of its growth before the change and then moved into a flatter period.
In one modelled Hawthorn case, Opteon estimated an owner could save more than $22,000 in capital gains tax by getting an independent valuation instead of relying only on the proposed ATO apportionment method.
Chapman said a valuation gives evidence of the property’s market value at the transition date. As a result, an owner can compare that figure with the ATO formula for the same asset.
July enquiries jump 30%
Meanwhile, Opteon recorded a 30% rise in enquiries in July as investors sought clarity on how the changes could affect them.
The firm’s market data shows softer demand for established residential investment property in some metropolitan markets. According to Chapman, some investors are reassessing their position and pulling back in parts of those markets.
Regional areas have shown greater resilience than some capital city markets. Opteon also found mortgage-related activity had fallen across most metropolitan markets.
Opteon released the figures in Sydney on 26 August. The company did not disclose how many owners are expected to choose a valuation, or how much a valuation would cost.
