What Is a Property Valuation?
A property valuation is a formal, written assessment of a property's market value at a specific date, prepared by a qualified and independent valuer. In Australia, a valuation is a legally defensible document that reflects what a willing buyer and willing seller would agree on in an arm's-length transaction—based on evidence, not opinion.
Valuations are used for a wide range of purposes including mortgage applications, Capital Gains Tax (CGT) calculations, stamp duty assessments, SMSF annual audits, estate administration, and family law proceedings. They can be prepared for residential, commercial, rural, and specialised properties.
Why Accurate Property Valuation Matters
An accurate, independently prepared valuation affects far more than the sale price. Here is where getting it right matters most:
- Buying or selling — avoid overpaying or underpricing by anchoring to evidence, not agent guides
- Mortgage & refinancing — lenders use your property's value to set your LVR, loan amount, and interest rate
- Capital Gains Tax (ATO) — a dated valuation establishes your cost base and reduces taxable gain
- Stamp duty / Transfer duty (Revenue NSW) — required for family transfers and non-arm's-length transactions
- SMSF audits — superannuation law requires annual market value evidence for fund assets
- Estate & probate — courts and executors need an independent valuation at the date of death
- Property tax — council rates and land tax assessments are based on assessed land values
The Three Main Property Valuation Methods
Australian valuers use three established approaches depending on the property type and purpose of the valuation. Most residential valuations use more than one method, with the comparable sales approach typically given the most weight.
1. Comparable Sales Method (Market Approach)
The most widely used method for residential property. The valuer identifies recent sales of properties with similar characteristics — location, size, condition, and features — and makes adjustments for any differences. The result is a market-supported value range, with the final figure reflecting the subject property's relative position.
hovr's Desktop and Certified valuations use this method as the primary approach, including 3–5 confirmed comparable sales as supporting evidence.
2. Income Approach (Capitalisation Method)
Used primarily for income-producing properties — residential rentals, commercial buildings, and SMSF assets. The valuer estimates the property's sustainable market rent, then applies a capitalisation rate (cap rate) derived from comparable investment sales to determine value. This method is particularly relevant for SMSF valuations, which require both a capital value and a rental income assessment to satisfy SISR Regulation 8.02B.
3. Cost Approach (Summation Method)
Applied to new constructions, unique properties, and assets where direct comparable sales are limited. The valuer estimates the current cost to replace the improvements (building and fixtures), subtracts depreciation for age and wear, then adds the separately assessed land value. This method is common for rural properties, specialised commercial buildings, and estate valuations involving unique assets.
Who Can Prepare a Property Valuation in Australia?
In Australia, formal property valuations must be prepared by a Certified Practising Valuer (CPV) — a professional registered with either the Australian Property Institute (API) or the Australian Valuers Institute (AVI). These bodies set professional standards, require ongoing education, and mandate professional indemnity insurance.
API / AVI Registered Valuer
Certified Practising Valuer (CPV)
Accepted — ATO, courts & lendersReal Estate Agent
Licensed agent — no valuation qualification
Not accepted — Price opinion onlyOnline AVM / Algorithm
No professional qualification
Not accepted — Indicative estimate onlyhovr Valuation
API or AVI Certified Practising Valuer
Accepted — ATO, courts & lendershovr non-AI valuations (Desktop, Certified, SMSF, and Estate) are checked and completed by API- or AVI-certified valuers.
When Do You Need a Property Valuation?
The most common triggers for a formal valuation in Australia:
🏠 Buying or Making an Offer
Confirm a property is priced at market value before committing. A Desktop valuation gives you evidence-backed confidence to negotiate or walk away.
🏷️ Selling or Listing
Set an asking price anchored to market evidence rather than agent opinion. Reduces the risk of under-pricing or stigmatising an overpriced listing.
🏦 Mortgage & Refinancing
Banks require a formal valuation to determine LVR and loan eligibility. A Certified valuation is typically required for formal lending purposes.
📊 Capital Gains Tax (CGT)
The ATO requires a dated valuation for cost-base determination — including when you first rent out your home, inherit a property, or dispose of an investment asset. Retrospective dates accepted.
🏦 SMSF Annual Audit
Superannuation law requires SMSF trustees to value fund assets at market value annually. Auditors require a valuation from a qualified independent source, compliant with SISR Regulation 8.02B.
⚖️ Estate, Probate & Family Law
Executors, solicitors, and courts require an independent valuation at the date of death for probate, and at the relevant date for family law asset division proceedings.
📋 Stamp Duty / Transfer Duty
Revenue NSW and other state offices may require a valuation for family transfers and non-arm's-length transactions under s. 272.
📈 Portfolio & Equity Review
Investors use Desktop valuations to track portfolio performance, benchmark against the market, and identify equity available to fund the next acquisition.
Choose the Right Valuation
hovr offers five valuation products prepared by API / AVI certified valuers — each designed for a specific use case.
| Product | Price | Turnaround | Best For | Written Report |
|---|---|---|---|---|
| Basic Basic | From $20 | Instant | Browsing, price sanity-check | No |
| Desktop Desktop | From $189 | Next day | Buying, selling, CGT, stamp duty, refinancing | Yes |
| Certified Certified | From $550 | 3–5 days | Mortgage / lender, court, formal legal | Yes + inspection |
| SMSF SMSF | From $185 | Next day | SMSF annual audit (SISR 8.02B) | Yes |
| Estate Estate | From $995 | ~4 days | Probate, deceased estate, family law | Yes + inspection |
Australia-wide • Transparent pricing • Fast turnaround