Should You Get Your Investment Property Valued? I Built a Calculator to Find Out

Okay, so the Australian Financial Review had reported that inside the Treasury's nine-step CGT formula, are you set to win or lose? Having a look at this article by Michelle Bowes, if you own an investment property, private, business or unlisted asset, a little-known tax formula is about to decide whether you save thousands or hand over a windfall to the tax office from 1 July 27, the long-standing 50% Capital gains tax discount will be phased out for future gains replaced by an inflation index calculation.

To split your assets timeline, Treasury is set to introduce a complex DIY valuation method.

The problem is the Treasury's formula assumes your property value grew at a smooth rate.

If your biggest gains accrued before 2027, Treasury's method will penalize you by pushing profits into a higher taxing post-2027 bucket.

Now, before you spend money on an independent valuer, you'd want to have a look and understand exactly what this formula is.

Now, having a look at this article, and having a look at what the Treasury released, the complexity of this formula is huge.

You see here, step one, calculate the pre-July 2027 cost base, reduced cost base.

Okay, step two, divide the proceeds from the assets eventual sale by the first elements of the pre-July, 1 July 2027 cost base.

It goes on and on.

A lot of complexity in how the formula is done.

And I thought to myself, well, even as an accountant, even though I understand these concepts and could sit there and manually calculate this, why not build out a little calculator using Claude? to exact show me exactly in my scenario, whether or not evaluation would be helpful or not.

Now, What do we know? Conceptually, if your property has had an unusual amount of growth between the date you bought it and 30 June, 2027, you're more likely than not have to go get a valuation.

So if you take nothing else from this video, remember this, if you've bought a property and you look around in your street or you keep your eye on realestate.com and properties around your investment properties are going for heaps more than what you bought them, get a valuation.

All right, don't risk it.

Spend the four, five, six, $700, whatever it is, claim that as your part of your cost base or your cost and and lock it in because as we've seen we don't want to be paying any more tax but if you're someone that doesn't want to just throw valuation money in the bin especially if you're not going to need it you don't want to waste 700 or you're just curious about which which method would help you more i want to run you through this calculator Okay, valuation or formula.