The ATO has issued an information sheet to help taxpayers get their property valuations right.
They say that practitioners or their clients can apply for a market value private ruling, by either:
- asking the ATO to provide a valuation (they will be required to pay for the work of the valuer); or
- providing the ATO with a valuation and asking them to confirm it – this generally costs less, provided the valuation meets the ATO’s requirements.
There are several advantages to requesting a market value private ruling, as opposed to obtaining a private valuation, as a market value private ruling:
- gives the client greater certainty about their tax matters;
- is binding advice that the client can rely on;
- is completed by a professional valuer and the client can be involved in the selection and appointment of that valuer; and
- removes the risk of providing the ATO with a valuation that does not meet its requirements, which could lead to further costs for the client.
ATO warns about doing your own valuation
According to the ATO, taxpayers who undertake their own valuations – or use valuations from people without adequate qualifications – risk incorrectly reporting their tax, and may be liable to pay administrative penalties.
However, taxpayers who use a qualified valuer or equivalent professional for taxation purposes will generally not be liable to a penalty if they have provided the valuer with accurate information should the valuation ultimately prove to be deficient.