Who may undertake a market valuation?
For tax purposes, it is usually the valuation process undertaken rather than who conducted it, that governs the acceptability of the valuation. However, some exceptions do exist; for example, only a professional valuer may undertake a market valuation for GST margin scheme purposes or for determining non-monetary consideration for GST purposes.
Depending on the situation, a market valuation may be undertaken by one of the following – a:
- registered valuer
- member of a recognised professional valuation body (see Qualifications and experience)
- director, for balance sheet purposes
- person without formal valuation qualifications whose assessment is based on reasonably objective and supportable data.
Except for the most straightforward valuation processes, valuations undertaken by persons experienced in their field of valuation would be expected to provide more reliable values than those provided by non-experts.
According to legal precedent, experts who assess market value should have specific knowledge, experience and judgment in that particular field. While professional qualifications may add weight to the valuer's opinion, he or she should also display personal integrity and competence. To ensure the objectivity of the report, the valuer should be independent of the interests of the party commissioning the report.
The valuation process should be adequately documented; if it isn't, we may not accept the resulting value as a market value. See Valuation reports for more on documentation.
Qualifications and experience
Formal qualifications and membership of appropriate industry and professional bodies are prima facie evidence of a valuer's expertise.
Valuers may have the qualifications, registrations, memberships and experience detailed in the following sections.
Property valuers operating in New South Wales, Queensland and Western Australia are registered with a state board established by legislation and responsible to a minister. The boards register and discipline people who conduct land valuations.
They usually examine the character, experience and qualifications of applicants before they give them full or conditional registration as practising valuers.
In other states and territories the professional bodies have the dual role of advancing the profession and maintaining the practice standards of their members.
Valuers of real property and equipment may seek membership of bodies such as the Australian Property Institute and the Royal Institution of Chartered Surveyors. The main role of these bodies is to set and maintain high standards of professional practice, education, ethics and discipline.
There is no formal admissions board in Australia for business valuers (encompassing the valuation of businesses, securities and intangible assets). Business valuers traditionally have significant experience in areas such as financial markets, investment banking, corporate finance, corporate management, and academic qualifications in areas such as accounting, finance or economics.
Valuers of cultural or heritage material
Valuers of cultural or heritage material may seek 'approved valuer' status within their area of expertise under the Cultural Gifts Program.