Capital Gains Tax Reform Proposals Will Strengthen The Role Of Certified Valuers

Source: AVAA

If the proposed capital gains tax reforms announced in the 2026 Australian Government Budget proceed, millions of Australians could find that the amount of tax they ultimately pay depends not simply on legislation, but on the quality of the valuation evidence supporting their assets. For taxpayers, advisers and businesses alike, accurate and defensible valuations are essential to certainty, lower compliance costs and avoiding expensive disputes for years and potentially decades into the future.

Much of the public discussion surrounding the proposed capital tax reforms has focused on housing affordability and investment behaviour. Yet there is a practical issue sitting behind the policy debate that has received comparatively little attention. The proposed tax law determines what is taxable, and the valuation determines how much is taxable. Unless values can be established consistently and supported by reliable evidence, the effectiveness of the reforms themselves may be undermined.

That was the focus of the Auctioneers and Valuers Association of Australia's (AVAA)submission to the Senate Standing Committee on Economics inquiry that's reviewing the legislation. Rather than taking a position on the merits of the reforms, AVAA concentrated on implementation and the role that valuation will play in supporting an efficient and fair tax system.

AVAA's submission argued that valuation should be recognised as critical tax administration infrastructure, much like accounting standards and auditing frameworks. The proposed changes create a far greater reliance upon valuation evidence than has historically existed within the capital gains tax system. Distinguishing gains that accrued before and after 1 July 2027, dealing with pre-CGT assets and applying indexation arrangements all depend upon reliable values.

Importantly, the reforms affect much more than residential property, despite the policy focus on these assets. They potentially extend across fine art and antiques, memorabilia and collectibles, rare books and coins, motor vehicles and even firearms. Many of these markets are characterised by infrequent transactions and limited market evidence. Determining value requires the expertise of an AVAA Certified Valuer (CVAu) and their professional judgement rather than simply identifying comparable asset sales. AVAA has warned the Australian Government that implementation guidance developed with residential property in mind risks overlooking the practical realities of these diverse asset classes.

A central recommendation of AVAA’s submission was the development of a formal Capital Gains Tax Valuation Framework by The Treasury and the Australian Taxation Office (ATO). AVAA proposed that such a framework should address valuation methodologies, evidentiary standards, record-keeping expectations, retrospective valuations, specialist asset classes, pre-CGT assets, professional competency and dispute minimisation measures. The Association also recommended taxpayer education programs and practical safe harbour arrangements to reduce unnecessary compliance costs.

AVAA strongly emphasised the importance of establishing reliable values around the 1 July 2027 commencement date. A valuation prepared contemporaneously provides a stronger evidentiary foundation than one reconstructed years later. At the same time, the submission recognised that retrospective valuations are a well-established discipline and should be accepted where prepared by a certified valuer using recognised methodologies and supported by appropriate evidence.

The submission also highlighted that confidence in valuation outcomes depends upon confidence in the professionals preparing them. Competency, independence, continuing professional development and professional accountability all contribute to the integrity of the tax system. AVAA argued that taxpayers and regulators should be encouraged to rely upon professionals operating within recognised frameworks. The AVAA Certified Valuer (CVAu) credential, supported by AVAA Professional Standards, provides one such framework across a broad range of asset classes.

Importantly, AVAA's policy advocacy has been driven by members. The practical experience of professionals serving on the AVAA Government Affairs Committee shaped the submission and identified issues that might otherwise have been overlooked. That member-driven advocacy has already resulted in direct engagement with the Federal Government. Beyond parliamentary interest, The Treasury has commenced discussions with AVAA regarding implementation issues, providing an opportunity for technical expertise to inform policy development.

Whatever the final shape of the reforms, one thing is clear. High-quality valuation will be fundamental to taxpayer certainty, administrative efficiency and public confidence in the system. Investment in professional standards, competent practitioners and clear valuation guidance should not be viewed as a compliance burden. It should be recognised for what it is: an investment in ensuring that one of the most significant changes to Australia's capital gains tax regime in decades operates fairly, consistently and as intended.