For valuers of fine art and antiques, memorabilia and collectables, rare coins and stamps, jewellery and other investment-grade assets, the recent changes to capital gains tax (CGT) raise some important technical questions. How will historical market values be established? What evidence will the Australian Taxation Office (ATO) expect? And how can valuers protect their clients when the difference between two defensible valuations could have substantial taxation consequences?
These questions are becoming increasingly relevant as the Australian Government progresses its CGT reform agenda. While much of the public debate has concentrated on housing, the broader implications for valuation methodology, taxation compliance and a valiers professional liability deserve considerably more attention. For certified valuers working with non-property assets, the central issue is the relationship between the applicable tax rules, the valuation date and the evidence required to establish market value.
The ATO already requires market valuations used for taxation purposes to be objective, supportable and based on appropriate evidence. Its guidance places particular importance on the valuation process, the professional competence of the valuer and the ability to substantiate conclusions. Consider a collection of Australian paintings acquired over several decades, an inherited collection of rare coins, or specialised industrial machinery for which comparable transactions are infrequent.
Establishing market value at a historical date requires considerably more than applying today’s prices retrospectively. The valuer must consider contemporaneous market evidence, asset condition at the relevant date, provenance, comparable transactions, market liquidity and changes in demand.
For thinly traded assets, this presents substantial methodological challenges. Auction results may provide useful evidence, but differences in condition, attribution, transaction circumstances and buyer participation can materially affect comparability.
Defensible Market Valuations Are Critical
The CGT reforms will place greater importance on defensible market valuations, particularly for historical and thinly traded assets. Valuers need to understand the legislative changes, valuation dates, evidentiary requirements and potential taxation consequences. Getting these matters right is essential to protecting clients, managing professional liability and providing valuations that withstand ATO scrutiny. This will be discussed at the 2026 Australia Valuers and Auctioneers Symposia held in Sydney on 21 October 2026, Melbourne on 20 October 2026 and Brisbane on 23 October 2026/
The distinction between an auction estimate, realised price, replacement value and market value is particularly important. Each serves a different purpose, and substituting one for another can materially distort a client’s taxation position. Where a valuation establishes a tax cost base or supports a market-value substitution under the Income Tax Assessment Act 1997, errors may affect the calculation of a capital gain, resulting tax liability and exposure to subsequent ATO review.
A professional valuation report prepared by a certified valuer is critical for clients, as it should clearly identify the valuation date, basis of value, intended taxation purpose, evidence examined, methodology adopted, material assumptions and limitations. These considerations also reinforce the importance of AVAA Professional Standard 6 – Minimum Valuation Report Requirements that is the national benchmark for valuation reporting.
The Significance Of The Reforms For Valuers
The significance of the CGT reforms for certified valuers becomes clearer when examining the proposed transition arrangements. From 1 July 2027, the existing 50% CGT discount is to be replaced, for affected taxpayers, by inflation-based cost-base indexation and a 30% minimum tax on capital gains. Importantly, the reforms extend beyond assets acquired after commencement. For assets already held, transitional provisions provide for separating gains accrued before and after 1 July 2027. This introduces a potentially substantial requirement for market valuations at the commencement date, including assets acquired before September 1985. These will be canvassed at the 2026 Auctioneers and Valuers Symposia, so be sure to book your ticket today.
For certified valuers, the implications are immediate as clients holding significant collections, valuable individual objects or business assets may benefit from obtaining contemporaneous evidence of market value rather than attempting to reconstruct it years later. Precisely how alternative apportionment arrangements operate, and when a formal valuation provides the strongest evidentiary protection, are questions worth examining carefully.
For anyone preparing valuations that clients may rely upon for taxation purposes, this is a conversation worth being part of. Understanding the reforms now could make a considerable difference to the advice and professional services clients receive in the years ahead.
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Interested In Finding Out More?
If you’d like more information in the 2026 Auctioneers and Valuers Symposia, send an email to cpd@avaa.com.au or telephone 1300 928 165. You can also stay up to date by following AVAA on LinkedIn, X/Twitter and Facebook.
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