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Understanding Retrospective Valuations

By Samantha Grant

Retrospective Valuations

Simply put, a retrospective otherwise known as a backdated valuation is an estimate of the value of a property or business at a certain time prior to the market today. Retrospective valuations are required when you need help with estate planning, tax purposes, and any other financial issues that may arise.

This blog is a guide to help you understand retrospective valuations and when you may need one.

As we mentioned prior, a retrospective valuation determines the value of a property at a specific time in history. The most common use for this type of valuation is to receive a report that will detail and identify a property investor’s capital gains tax liability which is dependent on the increase in the value from the time it was purchased to the time of sale.

There are other circumstances to consider when you require a retrospective valuation report:

  • Separation from a spouse
  • Inheritance of a property for deceased estate

No matter the reason this particular valuation is helpful in many circumstances.

Knowing the value of your property at a certain time as well as the current value of today gives you a clear idea of how the property value has increased over time. And this will help you determine what value you would sell your property at on the market.

Retrospective valuations help with tax planning when it comes to your business or personal assets. If you’re wondering what insurance coverage is appropriate or want to know the correct market value, you might need this valuation.

Our role as independent valuers is to accurately identify the original price at the date in question. A historical data analysis and physical inspection would need to be completed for a comprehensive valuation report, requiring the highest knowledge and understanding of the subject property to benefit your requirements and exceed the best outcome.

A historical data analysis

Our property valuers have access to a database which contains all historical market value data and information of the property and market conditions at a particular time.

We all know the value of a property fluctuates; any significant changes can impact the current sale price as a previous fluctuation will have affected the historical valuation of a property.

A physical inspection

Our valuers conduct on-site inspections of the property, this allows them to gather further information and evidence to help determine and provide you with an accurate property valuation, this can have a significant influence on the overall value.

Our valuers will look at:

  • the condition of the property
  • complex or hidden attributes that could not be established through data analysis
  • potential structural and pest issues; and
  • the surrounding area and available amenities

While a physical inspection may not always be required, the property valuer has a good picture of details that would otherwise be overlooked.

Conclusion

We have broken down the key principles to understanding a retrospective valuation and the reason why you would require one. Our valuation services can benefit you and your future. Our valuers take into account any major changes to the property, as well as market conditions and previous sales within the area amongst other factors, to determine an accurate property value.

As we said, there are many reasons why you would require a valuation if you’re new to the property world or even to valuations.  Speak with one of our team members to get you started on the right path and what service is best suited to your property related purpose whether it’s for residential or commercial we have a valuer for you.