How to Value Your Property at 1 July 2027 for CGT Purposes: The Complete Guide

Every Australian property investor who owns an investment asset on 1 July 2027 will need to know the market value of that asset on that day. It is the single most important number in the entire 2027 CGT reform. It determines how much of your future capital gain attracts the old 50% discount (the pre-2027 portion) and how much attracts the new CPI-indexation regime (the post-2027 portion). Get it right and you split a future tax liability cleanly. Get it wrong or fail to establish it at all and you end up at the mercy of the ATO's apportionment formula, which may not reflect the actual value of your property at all.

Treasury has confirmed two methods are permitted for establishing the 1 July 2027 value: (a) a formal valuation, or (b) the ATO apportionment formula. This guide explains what each method involves, when each is appropriate, what it costs, and how to document the result so it survives an ATO audit.

Why the 1 July 2027 valuation matters

Under the transitional rules announced in the 2026-27 Budget, any asset owned on 1 July 2027 is taxed in two parts when eventually sold:

• Pre-2027 gain: the difference between the original cost base and the value on 1 July 2027, taxed under the old 50% discount.
• Post-2027 gain: the difference between the indexed 1 July 2027 value and the eventual sale price, taxed under the new indexed regime.

The split point is the 1 July 2027 value. A higher value increases the pre-2027 gain (50% discount) and reduces the post-2027 gain (indexed regime). For high-growth assets, this usually produces a lower total tax bill. For low-growth assets, the difference is smaller.

Method 1: Formal valuation by a registered valuer

A formal valuation is a written assessment of a property's market value as at a specific date by a member of the Australian Property Institute (API) either a Certified Practising Valuer (CPV) or a Registered Valuer. The valuation considers comparable sales in the immediate period around the valuation date, the property's condition, planning context, and improvements.

What you ask for

Request a retrospective market valuation as at 1 July 2027. Most valuers can prepare retrospective valuations up to several years after the effective date, drawing on sales data from the relevant period. Submit:

• Property address and title details.
• Date of original purchase and price (for context).
• List of capital improvements with dates and costs.
• Tenancy schedule and rent at the valuation date.
• Floor plans, building reports and photos if available.

What you receive

A written report (typically 8-15 pages) showing the valuer's methodology, comparable sales used, condition notes, and the final market value figure. This document is what you keep on file for the ATO.

Method 2: The ATO apportionment formula

For investors who do not obtain a formal valuation, the ATO will provide an apportionment formula that estimates the 1 July 2027 value by linear interpolation between the original cost base and the eventual sale price, weighted by the actual annual growth rate over the holding period.

The general formula is:

Value at 1 July 2027 = Original cost × (1 + r)ⁿ

Where r is the annualised growth rate from purchase to sale, and n is the number of years from purchase to 1 July 2027. This effectively assumes the property grew at a constant rate across the entire holding period.

Worked example

Jane bought her property for $800,000 in July 2022 and sold for $1.6 million in July 2032. Annualised growth rate: 7.2%. Years from purchase to 1 July 2027: 5.

Apportioned value at 1 July 2027 = $800,000 × (1.072)⁵ = $1,131,371.

The ATO will release official tools and calculators implementing this formula closer to commencement.

Which method to choose

Use a formal valuation when:

• Your property has high absolute value (typically $1 million or more).
• The property's growth has been uneven (renovations, area gentrification, rezoning).
• You expect to hold for many years the saving compounds.
• The property is unusual (mixed-use, commercial, regional, off-market improvements).
• You want certainty formal valuations are harder for the ATO to challenge.

Use the ATO formula when:

• The property has low absolute value (under $500,000).
• Growth has been smooth and roughly linear.
• You expect to sell soon after 2027 the difference is small.
• You hold listed shares or ETFs the formula collapses to the quoted 30 June 2027 price.

Cost comparison

For a $1.2 million investment property where a formal valuation comes in 5% higher than the ATO formula would have, the resulting tax saving for a high-marginal-rate investor can be $10,000+ on eventual sale. A $600 valuation fee in 2027 is excellent value insurance.

What to document

The ATO requires you to keep CGT records for at least five years after the asset is sold. For the 1 July 2027 valuation, retain:

• The signed, dated valuer's report (or printed ATO formula output).
• Engagement letter and invoice from the valuer.
• Comparable sales data the valuer relied upon (if not in the report).
• Photographs of the property condition around 1 July 2027.
• Any rent statements, lease agreements and outgoings statements at the valuation date.

Store these in a dedicated CGT folder digital and physical. Many investors lose property records during moves or computer migrations; the ATO does not accept "I lost the file" as an excuse.

Common pitfalls

• Using a bank valuation. Bank valuations are for lending purposes and tend to be conservative. They are not accepted by the ATO as a 1 July 2027 reference value. A CoreLogic-style report can corroborate but does not replace a formal valuation see our guide on how to read a CoreLogic property report.
• Using the rates notice valuation. Council unimproved capital values (UCVs) are not market values. They are statutory valuations and should not be used.
• Waiting until sale. Retrospective valuations get harder, more expensive and less accurate over time. Do it in 2027 while comparable sales are abundant.
• One valuer for everything. If you have property in multiple states, use valuers who know each local market. National firms often subcontract anyway.

Authoritative references: ATO: Tax reform Reforming negative gearing and capital gains tax; Treasury factsheet: Negative gearing and capital gains tax reform (PDF).

This article provides general information about the 2026-27 Federal Budget CGT reform measures announced for commencement on 1 July 2027 and is not financial, tax or legal advice. Tax outcomes depend on individual circumstances. Always consult a registered tax agent, financial adviser or the Australian Taxation Office before acting. Treasury factsheets and the official Budget Papers remain the authoritative source.