The Australian Treasury’s proposed do-it-yourself valuation method for the new capital gains tax regime is drawing sharp criticism from accounting professionals who argue the nine-step formula is overly complex and risks overtaxing investors.
The plan was introduced to help small businesses and individual investors avoid the high costs of professional property valuations, but experts say the self-assessment route may ultimately cost more in tax liabilities than hiring a valuer.
The backlash highlights the compliance challenges facing more than 2 million Australian investors holding property and private business interests.
Under the new framework, investors seeking to bypass professional valuation fees must navigate a detailed calculation process to determine the market value of their assets.
Accountants warn that the formula’s intricacy increases the likelihood of errors, which could lead to higher effective tax rates.
This concern comes as analysis suggests the broader capital gains tax legislation could push effective rates as high as 80% for certain investors, particularly those unable to offset losses under the revised rules.
The backlash highlights the compliance challenges facing more than 2 million Australian investors holding property and private business interests.