Calculating Market Value for Probate or Deceased Estate purposes: A Guide to Probate Valuations

Dealing with a deceased estate can be a complex and sensitive process, particularly when it involves commercial property. Probate valuations are a critical step in administering an estate, as they help determine the market value of the property at the time of the owner’s death. This article provides a comprehensive guide to probate valuations, explaining their importance and detailing the process for assessing the market value of commercial property for deceased estates.

Understanding Probate Valuations

Probate valuations are conducted to establish the value of a deceased person’s property at the date of death. This valuation is essential for:

  • Determining Inheritance Tax: In some jurisdictions, inheritance tax liabilities are based on the total value of the deceased’s assets.
  • Equitable Asset Distribution: Helps ensure that the distribution of the estate among the beneficiaries or can be used to establish a selling price if the property is to be sold and may help avoid issues between beneficiaries.
  • Legal Compliance: Ensures compliance with various legal requirements that might govern the deceased’s assets.

The Process of Probate Valuation for Commercial Property

  1. Engage a Qualified Valuer: An executor or the beneficiary of an estate will instruct a valuer. It is essential to choose one who specialises in commercial valuations and understands probate assessments.
  2. Document Collection: The valuer will need access to all necessary documentation, such as a copy of the lease and passing net rental details (if applicable) plus outgoings such as Land Tax and Council Rate etc.
  3. Property Inspection: A thorough inspection of the commercial property is conducted to assess its condition, location, size, and any other factors that influence its market value.
  4. Market Analysis: The valuer analyses comparable property sales locally.
  5. Valuation Report: A comprehensive report is produced and market value assessed.

Choosing the Right Commercial Property Valuer

When selecting a valuer for probate purposes, ensure that they:

  • Have relevant experience in valuing the type of commercial property.
  • Has knowledge of local market conditions.
  • Is a Certified Practicing Valuer and member of the Australian Property Institute (API).

Calculating the value of commercial properties for deceased estates is a task that requires sensitivity and expertise. If you need expert assistance assessing the market value of a commercial property for probate or deceased estate purposes consider engaging with professionals like those at Power Commercial. As specialists in this field, we are equipped to provide detailed and compliant valuations to ease the probate process.