When a relationship breaks down, one of the most complex and contentious aspects of separation is the division of property. Disputes can often arise regarding the value of primary assets such as the family home, businesses, investments or personal property such as art and collectibles. It is important that there is an accurate value of your assets when deciding how property is divided.

Property valuations can often be paramount in ensuring a fair property settlement between you and your former partner.

What is the property of the parties?

The Court considers all of the property of the parties when it comes to property settlement.

There is a need to identify and value all the property of you and your former partner. This includes assets, liabilities and superannuation in which you and/or your former partner have an interest jointly, individually or, in some cases, via corporate entities or trusts.

Property can include:

• real estate, such as your family home, investment property and/or commercial property;
• savings in bank accounts;
• investments such as shares and cryptocurrency;
• motor vehicles, caravans, boats etc;
• furniture;
• jewellery;
• interest in a business, company and trust;
• superannuation, including self-managed superannuation funds; and
• liabilities such as loans, credit cards and personal debts.

You can read more general information about property settlement in our earlier blog, “A guide to family law property settlement”.

Initial steps to value property

Importantly, property is valued at the time of the property settlement and not at the date of separation.

For assets such as funds in a bank account, parties can often rely on the current balances to determine the value. For other property, such as real estate, shares and business interests, the value is generally the “market value”.

In many cases, the most significant asset held by the parties is the family home. As an initial starting point, parties may obtain appraisals from real estate agents to help inform themselves about the value of the family home. Market appraisals can be considered informal estimates and tend to be higher in value as agents typically use them to attract listings.

It is important to remember that market appraisals are not a proper and formal valuation, usually have little to no weight in Court proceedings, and may be disputed by your former partner.

When do I need an independent property valuation?

If you and your former partner cannot agree on the value of a particular item of property, then it may be necessary to obtain an independent valuation by an expert.

This is often referred to as a Single Expert who is generally jointly appointed by both parties or by Order of the Court if there is no agreement. The Single Expert valuer must act independently and objectively and comply with the Federal Circuit and Family Court of Australia (Family Law) Rules 2001. This property valuation can generally be relied upon as evidence in Court proceedings.

This formal approach to property valuations can reduce conflict between you and your former partner and ensure that the valuation is not skewed in favour of one party. A formal independent valuation can provide clarity, transparency and a foundation for a fair property settlement. It can also help separated couples avoid protracted disputes and/or litigation.

Real estate valuations

For real estate, parties can jointly engage a certified property valuer to prepare an independent valuation of the property. The valuer will usually conduct a physical inspection of the property and provide a detailed report regarding the property, including setting out the current market value.  Parties can then use this report in negotiations or Court proceedings.

Business interest valuations

Business interests can also require a Single Expert valuation in family law property settlements. If either you and/or your former partner owns a business or has a business interest in an entity, you may wish to jointly appoint a chartered accountant or certified business valuer to prepare an expert valuation.

These valuations can be complex, and the valuer will generally need an array of financial documents, including tax returns, financial statements, agreements and company constitutions.

Who pays for an independent property valuation?

Valuation costs vary depending on the type of asset and the complexity involved. The costs of a Single Expert property valuation are usually shared equally by the parties.

How a family lawyer can help

Navigating property valuations can be daunting, especially during an emotionally charged time. Whether you are negotiating a property settlement or going through court proceedings, understanding and, if necessary, obtaining property valuations can help you make informed decisions and avoid unnecessary disputes.

At Smith Family Law, our experienced team can guide you through each step of a property settlement, including providing you with advice on if, when and how to obtain property valuations. Contact us to speak with one of our family lawyers today.

Contacting Smith Family Law

📞 03 8625 8957

📧 info@smithfamilylaw.com.au