What will the Commissioner accept as "formal valuation evidence"?
The updated guidance also outlines the type of valuation evidence, and the circumstances where this may be needed, when determining whether a company or unit trust scheme is a land holder.
Generally, the Commissioner will require a taxpayer to obtain and provide a valuation from a competent valuer (i.e. either a certified practising valuer who is a member of the Australian Property Institute or a member of the Real Estate Institute of Victoria Ltd with sworn valuer accreditation) on any one or more of the company or unit trust scheme's land holdings if:
- the value of the land holding, as estimated by the taxpayer, is above $1 million or is low in comparison with its municipal capital improved value (irrespective of its estimated value); or
- the land holding was acquired by the company or unit trust more than 12 months before the date of the relevant acquisition (which is the date when a person acquires a significant interest in a company or unit trust landholder entity); or
- the taxpayer has submitted a valuation from a competent valuer where:
- the valuation provides a value for the land more than 12 months before the date of the relevant acquisition; or
- the valuation provides a value for the land within 12 months of the date of the relevant acquisition but the valuation has not taken into account planning approvals or permits obtained or other improvements made to the land prior to the date of the relevant acquisition.
In specific circumstances, where a land holder has an interest in fixtures separately from the land on which they are located, or holds land on which items have been fixed by the landholder or another person, the Commissioner is willing to consider whether the written down book value of those fixtures provides a reasonable estimate of value in the absence of formal valuation evidence.
The Commissioner may accept the written down book value evidence as being reasonable if the fixtures have not been written down to a zero value and are general in nature (ie. air conditioning units in an office or display shelves in a retail store) and not bespoke or specialised items of plant and equipment.