The $500 valuation every property-investing client needs by 30 June 2027

Most clients do not yet know they may need a valuation. Many practices have not yet built the communication process around it. In the absence of a registered valuation, the ATO falls back on a holding-period apportionment formula that estimates the 30 June 2027 value from the asset's growth rate over the full holding period. In markets that grew quickly between 2015 and 2022 and then cooled — Sydney, Brisbane and Perth most acutely — that formula tends to understate the actual 30 June 2027 value, which in turn understates the portion of the gain eligible for the 50 per cent discount.

On numbers I have modelled, a Sydney house bought in 2015 for $1 million and sold in 2032 for $2 million could face roughly $40,000 more tax under the ATO default than under a $500 registered valuation. A realistic 30 June 2027 valuation captures the rapid growth Sydney saw through to 2022, while the ATO formula averages that growth across the full hold and back-casts a lower 2027 value. More of the gain sits in the pre-cutoff window where the 50 per cent discount still applies. For a client holding three or four investment properties, the compound cost moves into six figures.

Treasury's own fact sheet illustrates the scale of the reform with a separate example: an $800,000 property held to 2032 produces about $40,000 more tax under the new regime than under the old 50 per cent discount. That figure measures the cost of the reform itself, not the valuation choice within it. But the order of magnitude is instructive: these are tens-of-thousands-of-dollars decisions whichever way they are framed.

The valuation is not a tax-reduction tool, and it will not always produce the better outcome. Its real value is optionality. If the property grows more strongly after 30 June 2027 than over the holding period as a whole, the ATO default may produce the better result, and the investor can elect that path. But without a registered valuation, the client never has a clean comparison to make. The $500 spend is less about locking in one answer and more about preserving the ability to choose the better one.

For accountants advising those clients, the work breaks into three steps: a list, a letter, and a follow-up.

First, identify the affected clients. Any client who has held a residential investment property since before 7:30 PM AEST on 12 May 2026, and who is likely to sell after 1 July 2027, is in scope. The list can usually be pulled from existing CGT records in under an hour. Pre-1985 assets are worth a separate flag: gains accrued on these from 1 July 2027 will be subject to CGT for the first time since the tax was introduced, which makes the valuation question more pointed for older clients with long-held properties.

Second, send a one-page client letter explaining the change, the valuation date, and the cost of inaction. The letter should recommend a registered valuation at or near 30 June 2027, explain that the ATO default may produce a materially worse outcome in some cases, and make clear that the valuation gives the client an option rather than an obligation.

Third, follow up in writing at 12 months out, six months out, and one month out. This is the step most practices will skip. Clients rarely act on the first contact. They act when the issue is repeated, documented, and made practical.

There is a professional risk dimension as well. Five years from now, when these properties are being sold and the tax bills are landing, the question 'why didn't my accountant tell me?' will be asked in a lot of practices. Accountants who can point to documented client communication in 2026 and 2027 will be in a very different position from those who cannot.

The 30 June 2027 valuation is not the only Budget item that touches property-investor clients. The reform restricts negative gearing on established residential property from 1 July 2027 to losses against other residential property income, not wages. Existing investors are grandfathered. Discretionary trust holdings face a separate 30 per cent minimum tax from 1 July 2028, with a three-year rollover window opening on 1 July 2027 (BP1 p158, BP2 p21).

Each of these measures has client-communication implications. The valuation issue is the most immediate and the easiest to miss.

Twelve months will be a scramble. Six months will be a problem. The accountants who move now can spend an hour per client and potentially save those clients tens of thousands of dollars. The ones who do not may eventually face a far more difficult conversation.

Rasti Vaibhav CFA is the founder and CEO of Get RARE Properties (https://getrare.com.au). He was previously a quantitative fund manager at Westpac and AMP Capital, where he oversaw institutional portfolios in excess of $2 billion.