Retrospective Valuations

Retrospective Valuations are carried out to determine the value of a property at a previous point in time. Retrospective Valuations aka Backdated Valuations are sometimes required for various purposes such as family law property settlement, partnership disputes, or probate, but the most common purpose of a retrospective proeprty valuation is for working out the base value of an investment property for capital gains tax, when the 'home first used to produce income rule' applies.

To distribute each party's share of the assets in family law cases such as separation of couples, the value of the family home or portfolio of real estate must be established on the date they officially separated, which is a retrospective date. A fair and accurate backdated valuation report from ValuConsult at the retrospective date is used for this purpose. Similarly, in a deceased person's estate comprising real property, when there is disagreement over the value of the property by the beneficiaries or how the estate is to be distributed, a valuation for probate is backdated to the date of the person's demise.

A Retrospective Property Valuation MUST Consider Changes 

An obvious but sometimes overlooked fact about a property inspection for a retrospective valuation is that what is seen in the present day property inspection is definitely not the same as what it was at the retrospective valuation date. Even a very well maintained property as seen on the date of inspection, will have experienced some degree of fair wear and tear between the two dates. And in extreme cases, what is seen is significantly different from what it was at the backdate. The new kitchen benchtop, alfresco deck and laminated flooring were all added AFTER the retrospective valuation date. Furthermore, the state of the neighbourhood, local amenities and market conditions (to name just a few factors) has to be researched. For example, the nearby recently completed shopping centre or new train station were both non-existent at the retrospective valuation date. While these two amenities will surely enhance the desirability of a property's location and in turn its present day market value, they cannot be considered for the retrospective property value.

Retrospective valuations require the property valuer's skills and experience to practically reconstruct the state of the subject property, thoroughly research historical market conditions, sales and local amenities at the retrospective date of valuation. Often, the property in question may have had extensive works completed or renovations carried out over the years that could be missed during a current property inspection. Therefore, in addition to property valuation qualifications and years of valuation experience, a valuer who has both investigative skills and a working knowledge of building construction, has the advantage of identifying changes in the property from the retrospective date of valuation to the present date of inspection. Generally, the further back in time the more difficult it becomes to obtain accurate information.

What if an Inspection for a Retrospective Valuation is Not Possible?

A current inspection of the subject property may not be possible if the property has been sold, demolished or one or more new buildings have been erected on the site. In such circumstances, a kerbside inspection is carried out and other sources of information, particularly old photographs are used to reconstruct a more detailed picture of the state of the property including its fixtures, finishes, features and condition at the retrospective date of valuation.  If insufficient or incomplete information is available, the property is assumed to have been in an average condition.  

"As Is" is NOT the Same as "It Was"

If a property inspection is possible, the condition of the property, its current layout, fitout and finishes as observed on the date of inspection might differ from its state on the retrospective date of valuation. This difference could be slight (as in "fair wear and tear") or quite significant. Generally, the further back in time a back-dated valuation is, the more pronounced the differences will be.