Property Valuation for Deceased Estate: An Executor's Guide

Property Valuation for Deceased Estate: An Executor’s Guide

When administering a deceased estate, the key valuation question is usually market value at the date of death, not the eventual sale price. For executors and probate solicitors, that figure is the foundation for probate administration, estate accounting, and many CGT calculations for beneficiaries or the legal personal representative (LPR).[1][15]

In Australia, there is no federal estate tax or inheritance tax, so the practical role of a deceased estate valuation is to support probate, capital gains tax, duty, and state-based land tax or surcharge issues rather than any estate-duty filing.[1]

Why the date-of-death value matters

The death-date valuation is the anchor point for three separate tasks:

• Probate administration: to prepare an accurate inventory of estate assets and liabilities.[2][3][4][5][6][7][8]
• ATO CGT outcomes: to establish the relevant cost base for assets acquired from the deceased, especially where the asset is later sold by the estate or a beneficiary.[1]
• State revenue matters: to support transfer duty, land tax, and other state-based assessments where market value or unencumbered value is relevant.[10][11][12][13][14][15]

A common mistake is assuming the valuation should match the later sale price. It should not. The correct figure is the market value at the date of death, based on the property’s condition and market evidence at that time.[1][15]

Step 1: Confirm what needs to be valued

Start by identifying every asset that may need a valuation. In practice, that usually includes:

• Real property: houses, units, vacant land, rural holdings, commercial property, and partial interests.
• Personal property: jewellery, art, antiques, boats, collectables, and vehicles.
• Financial assets: bank balances, listed shares, managed funds, and other investments.
• Business interests: company shares, partnership interests, and unit trust holdings.
• Encumbered property: properties subject to mortgages or other debts.
• Jointly owned property: where the deceased’s beneficial interest must be separated from the co-owner’s interest.

For executors, the key is to distinguish between the asset value and any liability secured against it. A mortgage does not reduce the property’s market value; it is recorded separately in the estate accounts.

Step 2: Work out the legal and tax context

Before commissioning the valuation, identify the purpose of the report. The valuation approach may be similar, but the consequences differ:

Purpose	Why the valuation matters	Typical outcome
Probate / estate administration	Supports the inventory and distribution of estate assets	Market value at date of death
ATO CGT	Helps determine the cost base for later sale by estate or beneficiary	Often the date-of-death market value is critical[1]
State duty / land tax	Supports transfer and assessment processes	May require market value or unencumbered value[10][11][12][13][14][15]
Estate accounts	Ensures accurate reporting to beneficiaries and solicitors	Defensible recorded value[2][3][4][5][6][7][8]

For tax purposes, the ATO’s practical focus is market value where an arm’s-length price is not available.[1] For probate, state courts and registries typically expect asset values that are realistic and supportable at the date of death, although exact forms and evidentiary requirements vary by jurisdiction.[2][3][4][5][6][7][8]

Step 3: Engage a qualified valuer early

For most deceased estates, the most defensible option is a formal valuation from a qualified property valuer, particularly where the asset is:

• high value
• rural or development land
• mixed-use
• affected by renovations or deferred maintenance
• subject to easements, leases, or title complications
• likely to be disputed by beneficiaries or the ATO

Landmark’s estate valuation service is designed for this purpose, and a retrospective report can also be commissioned where the valuation date is in the past via retrospective valuation.

A formal report is preferable to an agent’s estimate or an online calculator. Those tools can be useful starting points, but they are usually too crude for probate, CGT, or state revenue purposes.

Step 4: Gather the right evidence

A retrospective valuation relies on evidence available around the date of death, not just the property’s current condition. The strongest reports usually draw on:

• title searches
• the will and probate documents
• death certificate
• mortgage statements
• tenancy agreements, if applicable
• photographs of the property’s condition
• inspection notes
• comparable sales close to the valuation date
• zoning and planning information
• building approvals, renovations, or demolition history
• trust, company, or partnership documents where ownership is indirect

This evidence matters because the valuer is reconstructing the property’s market position at a historical date. If the property has changed since death, the report must account for those changes carefully rather than simply using today’s sale price or a current desktop estimate.

Step 5: Understand how the valuation is used for CGT

For many Australian deceased estates, the main tax issue is capital gains tax, not estate tax.[1] The value at death can become the relevant baseline for later CGT calculations, depending on the asset and ownership history.

The ATO distinguishes between different categories of assets, including:

• assets that pass to the LPR
• assets that pass directly to beneficiaries
• pre-CGT assets
• main residence assets
• investment properties
• business assets[1]

A simple example:

• A deceased person owned an investment property.
• A qualified valuer determines the market value at date of death is $1.2 million.
• The property is sold by the beneficiary 18 months later for $1.35 million.
• Ignoring selling costs and other adjustments, the post-death gain is measured by reference to the relevant death-date cost base, not the original purchase price, subject to the applicable CGT rules.[1]

This is why an inaccurate valuation can create a later dispute. If the date-of-death value is set too low, the beneficiary may face an avoidable CGT liability. If it is set too high, the estate may face a challenge from the ATO or revenue office. The most defensible position is a valuation supported by market evidence and a reasoned methodology.[1]

Landmark’s capital gains tax valuation page is relevant where the deceased estate requires a report that is specifically structured for tax use.

Step 6: Allow for probate timing

Executors often ask when the valuation should be obtained. The practical answer is: as early as possible after death, especially if the estate includes property.

Early valuation helps with:

• probate inventory preparation
• beneficiary communication
• insurance cover adjustments
• rent, vacancy, and maintenance decisions
• sale planning
• CGT record keeping

State probate processes differ, but the common theme is that the estate inventory should reflect the deceased’s assets and liabilities at death.[2][3][4][5][6][7][8] In other words, you do not wait until the property is sold to work out value. The valuation supports the administration process from the beginning.

If the date of death was some time ago, a retrospective valuation can still be prepared. That is often necessary where probate is delayed, where a beneficiary is querying the figures, or where tax records were never properly established at the time.

Step 7: Be clear about what a retrospective valuation is

A retrospective valuation is a professional opinion of market value as at a past date, usually the date of death. It is not a guess and it is not simply today’s value adjusted backwards.

A good retrospective report will usually consider:

• the property’s condition at the date of death
• the local market at that date
• comparable sales around that date
• any legal or physical constraints that existed then
• title and zoning factors
• photographs or records showing historical condition

That evidence base is what makes the valuation defensible for probate and tax purposes. Where the property has since been renovated, tenanted, subdivided, or partially demolished, the valuer needs to isolate the historical position carefully.

Step 8: Keep gross value and debt separate

Executors sometimes describe the “value” of a property by subtracting the mortgage. That is useful for understanding the net estate position, but it is not the property’s market value.

A cleaner approach is:

• Gross asset value: the market value of the property at the date of death
• Liability: the mortgage or other secured debt
• Net estate effect: gross value less the liability

That distinction matters because probate and CGT calculations often turn on the gross market value, while estate distribution and cash flow planning depend on the net position.

Step 9: Watch for ownership complications

Some estates are straightforward; many are not. Extra care is needed where:

• the property is held as joint tenants
• the deceased owned only a partial interest
• the property is held through a company, trust, or partnership
• there are family loans or related-party arrangements
• there is a life tenant or life interest
• the property is subject to a lease or occupation right

These issues affect both value and entitlement. The legal title alone may not tell the whole story, so the executor and solicitor should confirm the beneficial ownership position before relying on any valuation.

Step 10: Keep the file audit-ready

A deceased estate valuation should be kept with a clear documentary trail. Retain:

• the valuation report
• comparable sales evidence
• inspection notes and photographs
• title and ownership documents
• mortgage statements
• probate records
• correspondence with beneficiaries or solicitors

That file may be needed later if the ATO, a revenue office, or a beneficiary questions the figure. Good records also make it easier to support later CGT calculations when the estate or beneficiary eventually disposes of the property.

When a formal valuation is especially important

A professional valuation is particularly important where the estate includes:

• a valuable residence
• rural land
• development potential
• a mixed-use property
• significant renovations or deterioration
• a disputed family arrangement
• indirect ownership through entities
• assets likely to be retained and rented before sale

Those are the situations where a rough estimate is least reliable and where later scrutiny is most likely.

If you need a defensible deceased estate valuation, Landmark Valuations can prepare a report suitable for probate administration, retrospective assessment, and CGT support. You can request a quote here: quote.

Sources:

• ATO — Capital gains tax and deceased estates
• NSW Probate and Administration Act 1898
• Victorian Administration and Probate Act 1958
• Queensland Succession Act 1981
• Western Australia Administration Act 1903
• South Australia Administration and Probate Act 1919
• Tasmania Administration and Probate Act 1935
• ACT Administration and Probate Act 1929
• Northern Territory Administration and Probate Act 1969
• Landmark Valuations — Estate valuation
• Landmark Valuations — Retrospective valuation
• Landmark Valuations — Capital gains tax valuation