Gavin Hulcombe, Managing Director, Commercial, Agribusiness & Government of Herron Todd White joined News24’s Business Now with Ross Greenwood to discuss the upcoming 2027 capital gains tax (CGT) valuation requirements. During the segment, he explored the significant administrative burden this shift will place on property investors and cautioned against relying on the Treasury’s proposed “straight-line” valuation method, emphasizing the importance of professional valuations for protecting financial interests.
The upcoming changes to the capital gains tax, effective July 1, 2027, have sparked significant concern regarding the requirement for individuals to value all their assets, including property and personal collections. For the estimated 2.25 million Australians holding investment properties, this potential valuation requirement has raised questions about feasibility and the massive administrative burden placed on investors.
Hulcombe acknowledges the scale of this challenge but suggests it will likely be manageable. He explains that while the relevant valuation date is set for July 1, 2027, many valuations will realistically be conducted retrospectively over a five-to-ten-year period. He points to existing precedents in the industry, such as the GST margin scheme, where retrospective valuations are already standard practice.
Regarding the Treasury’s proposed “straight-line” valuation method, which offers a simpler calculation alternative for those who do not wish to seek formal valuations immediately, Hulcombe urges caution. He argues that this simplified approach could significantly disadvantage many investors by triggering higher capital gains tax liabilities compared to recognizing the accurate valuation at the relevant date. Investors are advised to remain prudent and compare both methods to determine which best protects their financial interests.