Business valuation questions, answered.
79 questions Australian business owners, accountants and lawyers ask about valuing a private business, each answered in a few sentences by Oliver Group, an independent Australian business valuation firm. Every answer links to the page that sets out the reasoning in full. Last reviewed .
What a business valuation costs
Most valuation firms do not publish prices. These answers set out what the market charges and what Oliver Group charges, which is a fixed fee set by the annual turnover of the business.
How much does a business valuation cost in Australia?
Across the wider Australian market, formal valuation reports from traditional firms typically run $5,000 to $15,000+ and prices are rarely published. Oliver Group publishes fixed fees: the fee is set by the annual turnover of the business: $1,495 + GST under $2 million, $2,495 + GST from $2 million to $10 million, and $3,495 + GST over $10 million or for a start-up. The fee is confirmed in writing before work begins and never depends on the concluded value.
What does Oliver Group charge for a business valuation?
Oliver Group charges a fixed fee set by the annual turnover of the business: $1,495 + GST under $2 million, $2,495 + GST from $2 million to $10 million, and $3,495 + GST over $10 million or for a start-up. Every fee is published upfront and fixed at engagement, with defined add-ons of $495 per retrospective valuation date and $795 per additional entity. The current table is always live at /start/.
Why do business valuation fees vary so much?
Scope drives fee: the number of methodologies tested, the number of entities valued, whether the valuation date is historical, and the level of documentation the matter needs if reviewed. A simple current-date CGT event needs less than a small business CGT concession claim the ATO is likely to examine.
Are there any extra costs on top of the fixed fee?
Only the two published add-ons: a retrospective valuation date at +$495 per historical date, and each additional entity at +$795. Each is agreed at engagement, never added afterwards. There are no disbursements, no printing or 'sundries' charges, and no billing for emails or phone calls.
Fixed Fee Business Valuation: Know the Price Before You Start
What is the cheapest way to value a business in Australia?
The absolute cheapest options are free: a DIY rule-of-thumb multiple, an online calculator, or a broker appraisal. All three fail if anything, a tax position, a dispute, a sale price, actually rides on the number, because none discloses methodology, evidence or an accountable signature. Among options built to hold up under scrutiny, signed independent fixed-fee reports start from about $1,495 + GST.
The cheapest way to value a business in Australia: 7 options from $0 to $15,000+.
Is a cheap business valuation worth it?
It depends what the price is buying. A calculator output or an unsigned desktop estimate is cheap because nobody stands behind it, and it will not survive a question from a buyer, an accountant or the ATO. A signed report is cheap when the scope is fixed and the process is efficient, not when work has been left out. Ask who signs it, what methodology was applied, what evidence sits behind the multiple, and what the disclaimer excludes.
Can you get a business valuation for free in Australia?
You can get a free number, a broker appraisal, an online calculator estimate or an accountant's informal figure, but that is generally not a valuation. A valuation is a documented, evidence-led opinion of market value prepared by someone independent and accountable for the conclusion. Free options are not built to that standard, which is why they typically come with wording to the effect that the figure should not be relied upon.
Fixed Fee Business Valuation: Know the Price Before You Start
Is a business valuation tax deductible in Australia?
Often, yes. A valuation obtained to manage your tax affairs, substantiating a CGT position, testing small business concession eligibility, complying with a market value obligation, is generally deductible under s 25-5 of the Income Tax Assessment Act 1997. A valuation obtained to buy or sell a business instead typically forms part of the asset's CGT cost base as an incidental cost. The two treatments are alternatives, not both, and which applies depends on the purpose documented at the time. Confirm the treatment with your accountant before lodging.
Is a business valuation tax deductible? The two paths, explained.
How long a business valuation takes
How long does a business valuation take in Australia?
Most business valuations in Australia take two to seven weeks from complete documents to signed report, depending on the depth of the engagement. Oliver Group delivers a small-business draft in 2 business days and a medium-business draft in 3 business days. Delivery time starts once payment and all required information have been received.
What is the fastest way to get a business valuation?
The fastest business valuations are the ones where nothing has to be chased: a current valuation date rather than a retrospective one, a single entity, accountant-prepared financial statements already finalised, and the complete document set delivered at engagement. An indicative range is quicker still, but it is unsigned and not suited to tax purposes.
What slows a business valuation down?
Documents slow a business valuation down, not analysis. The common causes are prior-year financial statements still in draft with the accountant, third-party documents such as the lease or franchise agreement, related-party loan schedules that do not reconcile, add-backs claimed without supporting evidence, and ownership records that do not match ASIC.
When does the clock start on a business valuation?
The clock on a business valuation starts when the document set is complete, not when the engagement letter is signed. For Oliver Group's published delivery times, it starts once payment and all required information have been received. Normalisation cannot begin on half a financial picture, so material that arrives in fragments stretches the elapsed time.
How long does a retrospective or court valuation take?
A retrospective valuation takes longer because contemporaneous evidence from the historical period, including financial statements, industry data and comparable transactions, has to be assembled first, which can take weeks. Single-expert reports prepared for court run longer than other valuations because the timetable is set by the litigation, not the valuer.
Who can value a business, and how to choose a valuer
Is there such a thing as a certified business valuer in Australia?
No. There is no certification, licence or register for business valuers in Australia, and no government body issues one. The phrase comes from overseas credentials. What you can check instead is whether the valuer is independent, charges a fixed fee, signs the report in their own name and will explain the reasoning to whoever relies on it.
Who Can Value a Business in Australia? Qualifications, Credentials and How to Vet a Valuer
Can my accountant value my business?
Legally, yes, and for a planning figure that nobody else will test it is often the sensible option. For a CGT concession claim, a restructure, a shareholder buy-out, a family law settlement or a related-party transfer, an accountant who acts for the entity faces an independence question if the figure is challenged, and an independent signed valuation is the stronger position.
Who Can Value a Business in Australia? Qualifications, Credentials and How to Vet a Valuer
What is a business valuation specialist?
It is a description, not a licence. What matters is a valuer whose main work is valuing businesses, shares, units and goodwill rather than land, and who prepares reports to the standard the ATO, courts and lenders apply, with a stated purpose, basis, date, evidence and limitations. Oliver Group prepares independent business valuations only and is not a registered tax agent.
Who Can Value a Business in Australia? Qualifications, Credentials and How to Vet a Valuer
How do I choose a business valuer in Australia?
Check their valuation-specific accreditation and litigation experience, confirm whether they are proposing a valuation engagement or a calculation engagement, ask about independence from any counterparty, and check whether their fee is fixed or contingent on the outcome. A valuer who cannot answer these plainly is not the right choice regardless of price.
What red flags mean I should walk away from a business valuer?
Walk away from any valuer who will discuss a target number before doing the analysis, whose fee is contingent on the value reached, who claims a report will be ATO-approved (there is no such thing as ATO pre-approval), who cannot name who signs and reviews the report, or who won't disclose prior work for a related party or counterparty to the matter.
Can you value your own business yourself?
Yes. A careful owner can normalise three years of financial statements, judge maintainable earnings and apply an industry multiple to reach a genuinely useful DIY value, typically in an afternoon. What a DIY value cannot supply is independence, so it is not suited to a purpose where a third party, the ATO, a buyer, a lender or a court, needs to rely on the figure.
Can you value your own business? A DIY guide: and where DIY fails at review.
What is the difference between a broker appraisal and a formal valuation?
A broker appraisal estimates a listing price and is prepared by someone who is paid when the business sells. A formal valuation is prepared by an independent valuer with no stake in the outcome, sets out its evidence and assumptions, and is signed by the valuer who stands behind it. For anything involving tax, a transaction or a dispute, it is the signed, independent document you need.
Is a free online business valuation calculator accurate?
A calculator is a reasonable way to satisfy curiosity, but it applies a generic formula to unverified inputs. It cannot normalise your earnings, weigh owner dependence or customer concentration, or check what actually transfers to a buyer: and those are the factors that decide where you sit in your range. Use it to frame the question, not to answer it.
Can a remote valuation be relied on for tax or legal purposes?
A valuation's suitability for tax or legal reliance generally depends on its methodology, evidence and the qualifications of the signer, rather than on whether the valuer visited the premises: though acceptance by any specific reviewing party always depends on the facts of the matter. Oliver Group reports are prepared with ATO market valuation guidance in mind and are signed.
Online Business Valuation Australia | Remote, National, Defensible
What a business is worth, and the multiples used
What is a typical EBITDA multiple for a small business in Australia?
For most Australian private businesses with under $500k of normalised EBITDA the supportable range sits between about 1.5x and 4.5x, with healthcare and IT services at the top and hospitality, retail and trades at the bottom. Size, recurring revenue, customer concentration and owner dependence decide where a particular business falls, which is why the table gives ranges by industry and size band rather than a single figure.
EBITDA multiples by industry in Australia: what private businesses actually sell for.
Are these multiples applied to EBITDA or to SDE?
To normalised EBITDA only, with a market salary charged for the owner's role. Seller's discretionary earnings (SDE) adds the owner's full remuneration back, produces a larger earnings figure and attracts a lower multiple. Applying an EBITDA multiple to SDE overstates a business, and applying an SDE multiple to EBITDA understates it. The table and our industry pages state which basis they use.
EBITDA multiples by industry in Australia: what private businesses actually sell for.
Why do listed companies trade at much higher multiples than private businesses?
Because a listed company is larger, diversified, professionally managed, and its shares can be sold in seconds at a quoted price. A private business with $1m of EBITDA carries key-person risk, customer concentration and six to twelve months of sale process, and buyers price that risk in. Size, liquidity and key-person discounts together explain why a private industrial business trades at four times while its listed peer trades at twelve.
EBITDA multiples by industry in Australia: what private businesses actually sell for.
How do you value a business for sale in Australia?
A business for sale in Australia is valued in seven steps: normalising earnings, proving the add-backs, choosing a method, testing the multiple and concluding at a range, not a point. Steps 1 and 2, normalising the earnings and proving the add-backs, are where the value argument is won or lost. Steps 3 to 7 are where it is tested.
How to value a business for sale in Australia: a step-by-step guide for owners.
What is the future maintainable earnings method for valuing a business in Australia?
Capitalisation of future maintainable earnings, usually shortened to FME or CME, is the default valuation method for Australian private companies. It asks what level of profit a business can sustainably generate and what a purchaser would pay for each dollar of that profit. It rests on two judgment inputs, the maintainable earnings figure and the capitalisation multiple, then adjusts for debt and surplus assets to reach an equity value.
The future maintainable earnings method explained: Australia's default business valuation approach.
What is the difference between a revenue multiple and a profit multiple when valuing a business?
A revenue multiple and an EBITDA multiple answer different questions. An EBITDA multiple prices what the business keeps, as enterprise value per dollar of normalised earnings. A revenue multiple prices what the business generates, as enterprise value per dollar of top line, before any cost is deducted. For most trading businesses the two measures should converge on a similar enterprise value.
Revenue multiples vs profit multiples: which applies to your business?
How do you value a loss-making business in Australia?
A loss-making business is valued by testing three evidence-based methods: net realisable asset value as the floor, a turnaround discounted cash flow only where the recovery is already evidenced rather than forecast, and strategic value to a specific identified buyer. Earnings multiples cannot be used because they depend on a positive, sustainable maintainable earnings figure. A loss-making business is not automatically worth nothing, nor worth whatever a hopeful forecast claims.
What is the difference between personal goodwill and transferable goodwill in a business?
Transferable goodwill attaches to the business itself, while personal goodwill attaches to an individual. Transferable goodwill comes from the brand, systems, location, trained workforce, contracts and recurring revenue that keep producing earnings regardless of who owns the equity. Personal goodwill comes from the owner's skill, reputation, licence and relationships. Value that depends on the owner personally, in its raw form, is not saleable.
Personal vs transferable goodwill: why your business may be worth less than you think.
How does key person risk affect the value of a business?
Key person risk reduces the value of a business when its earnings depend materially on one individual, such as an owner, founder or specialist staff member, who is not contractually bound to stay. A buyer is buying future cash flows, so if those cash flows are concentrated in one person, the buyer prices that concentration in. It can show up wherever client relationships, supplier terms or technical knowledge sit with an individual.
Key person risk: how it cuts business value, and how to fix it.
Why do two valuers get different numbers for the same business in Australia?
Business valuations differ between competent valuers because a business is worth a supportable range, not a single figure like a property appraisal. Where a valuer concludes within that range depends on methodology choices, the information available to them, and judgment calls reasonable practitioners can make differently. Two reports landing well apart on the same business are not automatically evidence that one is wrong.
Why two valuers can get different numbers for the same business.
When should a business use DCF instead of capitalisation of maintainable earnings?
DCF fits businesses whose future cash flows are expected to differ materially and predictably from their history: strong, evidenced growth such as a SaaS business with contracted recurring revenue, an infrastructure asset with long-dated contracts, or a proven multi-site roll-out. Capitalisation of future maintainable earnings suits established, stable businesses whose future looks broadly like a normalised past, which describes most Australian SMEs. If the growth cannot be evidenced, maintainable earnings is usually the more defensible method.
Discounted Cash Flow Business Valuation in Australia: When DCF Is the Right Method
What businesses in each industry are worth
One short answer per industry, taken from the benchmark article for that industry. Each article sets out the sources, a worked example and what moves a business within the range.
How much is a bookkeeping business worth in Australia?
A bookkeeping practice is priced on its recurring client fees, and no reliable published range for bookkeeping-only practices was found. The closest benchmark is commentary on small accounting practices. One Queensland broker's guide says one or two person practices have historically sold at 60 to 80 cents per dollar of fees, with assets and work in progress added. One adviser's 2025 guide gives 60 to 100 per cent of annual fees.
How much is a cafe or restaurant worth in Australia?
Most Australian cafes and restaurants change hands at between roughly 1.5 and 2.5 times their adjusted annual earnings, where adjusted means a genuine market wage for the owner's work has already been deducted. A cafe generating $100,000 of properly adjusted earnings will typically sell somewhere between $150,000 and $250,000, plus stock at value.
How much is a cafe or restaurant worth? Realistic multiples for Australian hospitality.
How much is a childcare centre worth in Australia?
Most Australian childcare centres are valued at 3–5 times normalised EBITDA, rising toward 4.5–5x for a strong, high-occupancy metro long day care centre and nearer 3–4x for a smaller or regional centre. A per-licensed-place cross-check of roughly $30,000–$45,000 metro and $15,000–$25,000 regional is used to sanity-check the earnings-based figure. Both value the operating business, not the freehold.
How much is a childcare centre worth? Benchmarks and value drivers for Australian centres.
How much is a commercial cleaning business worth in Australia?
A commercial cleaning business in Australia is usually priced as a multiple of its normalised annual earnings, and the contract book drives that number far more than equipment does. Bsale, an Australian business-for-sale marketplace, showed an average asking price of about $359,000 across roughly 540 advertised cleaning businesses when checked in October 2026, which says nothing about what any one of them is worth.
How much is a construction business worth in Australia?
A building or construction business in Australia is valued as a multiple of normalised EBITDA, but only after the work in progress schedule has been restated to what was actually earned on each job. Broker and valuation-practice guides published in 2025 and 2026 quote a very wide band, from about 1 to about 6 times normalised EBITDA depending on the size and type of builder. Those are published guide figures, not audited transaction data.
How much is a dental practice worth in Australia?
Australian general dental practices are commonly quoted at between 50 and 80 per cent of annual gross fees, or three to five times normalised EBITDA for owner-operated practices. Practices with identical fees can sit at opposite ends of the range, depending on how full the chairs are, how much of the dentistry walks out the door with the principal, and the earnings after charging a market clinical wage for the principal's dentistry.
How much is a dental practice worth in Australia? Valuation multiples and what actually drives them.
How much is a financial planning book worth in Australia?
An Australian financial planning book is typically valued as a multiple of ongoing recurring revenue, with well-engaged, consent-compliant books trading toward the upper end of a sub-two-times range and weaker books at well under one times. There is no single multiple that reliably prices a book, and any figure quoted without qualification is a starting conversation, not a valuation.
How much is a franchise worth in Australia?
A franchisee's business sold on resale is typically priced as a multiple of normalised EBITDA, after royalties, marketing contributions, other franchisor payments and a market wage for whoever runs the unit. Published broker and adviser commentary commonly puts that multiple at roughly 2 to 4 times EBITDA, but it reflects brokers' observations rather than settled prices.
How much is a gym worth in Australia?
A gym business valuation in Australia is typically expressed as a multiple of adjusted owner earnings. Broker-quoted ranges commonly put owner-operated gyms at roughly 1.5 to 2.5 times adjusted owner earnings, and larger facilities that demonstrably run under management are quoted higher, commonly in the region of two to three times normalised EBITDA. Those ranges are market observations, not laws.
How much is a gym worth in Australia? The membership book, not the equipment, sets the price.
How much is a hair or beauty salon worth in Australia?
Broker commentary and industry rules of thumb in Australia and comparable markets commonly put hair and beauty salons somewhere between roughly 1.0 and 2.5 times adjusted owner earnings (seller's discretionary earnings, or SDE). Those are market observations, not a formula. The question that sets a salon's value more than any other is what happens when the previous owner is no longer behind the chair.
How much is a law firm worth in Australia?
A law firm in Australia is worth a supportable range, not a percentage of fees quoted in a corridor conversation. The range rests on maintainable earnings: the profit the firm could reasonably be expected to sustain under new ownership once every working principal is paid a fair market salary for the hours they bill. A rule of thumb prices revenue, not earnings, and says nothing about who the revenue belongs to.
How much is a manufacturing business worth in Australia?
An Australian manufacturing business's value is set by reconciling two figures: an EBITDA multiple that varies by subsector, customer concentration and certification, against the market value of its plant and equipment, not depreciated book value. A defensible valuation explains the gap between the two and why the business trades closer to one than the other. There is no single manufacturing multiple.
How much is a mechanic workshop worth in Australia?
A mechanic workshop is priced as a multiple of normalised earnings, after a market wage for whoever runs it. For mechanical workshops no reliable published range of completed sales was found, so the price rests on the repeat customer book, technician depth, equipment, licensing and the lease. For smash repairers, one Australian broker's 2026 report estimates 2.0 to 3.5 times EBITDA for independents without insurer panel relationships.
How much is a medical practice worth in Australia?
As a broad guide, small owner-operated general practices in Australia change hands at somewhere between one and four times normalised earnings, after a market-rate clinical wage for every doctor in the practice, including the owner. Larger group practices with genuine management infrastructure and six or more FTE GPs support multiples toward and beyond the top of that band. Specialist practices frequently sit at the bottom of the range or lower.
How much is a medical practice worth in Australia? Multiples, methods and the goodwill problem.
How much is a mortgage broking book worth in Australia?
A mortgage broking business or trail book in Australia is priced as a multiple of annual trail commission. One trail-book valuer and lender, in commentary reported by The Adviser in 2025, put sale multiples at roughly 1.9 to 3.7 times annual trail, with an average of about three times in FY2024-25. These are market observations from a commercial participant, not rules.
How much is a pharmacy worth in Australia?
As a broad guide, Australian community pharmacies change hands at somewhere between three and five times normalised EBITDA, plus stock at valuation. Strong assets, such as medical-centre pharmacies with secure tenure, trade toward and beyond the top of that band. Weaker assets, with heavy owner dependence, declining script volumes or a short lease with no options, sit at or under the bottom.
How much is a pharmacy worth in Australia? Multiples, the regulatory moat and the PBS problem.
How much is a physiotherapy clinic worth in Australia?
Australian physiotherapy and allied health clinics change hands at somewhere between two and four times normalised EBITDA, as a broad guide. Owner-operated single-site clinics where the principal carries the caseload sit toward the bottom of that band, and sometimes under it. Multi-practitioner clinics with genuine systems, spread referral bases and low owner dependence support three and a half to five times, particularly where allied health aggregators and private-equity-backed roll-ups are competing.
How much is a physiotherapy clinic worth in Australia? The multiple turns on whose caseload it is.
How much is a plumbing or electrical business worth in Australia?
Published Australian guides (2026 commentary from one business-for-sale marketplace and one adviser) put plumbing and electrical contracting businesses at roughly two to four times adjusted earnings. Owner-operators with no staff are quoted lower, from around one to two and a half times. The range is adviser commentary on differing earnings bases, not a transaction database, and asking prices are not settled prices.
How much is a pub worth in Australia?
A pub is priced on the earnings a buyer can keep, not on takings and not on the building. In practice that means maintainable EBITDA after a market wage for whoever runs the venue and a market rent for the premises. The price is that figure capitalised at a multiple or an equivalent rate, then adjusted for what the buyer must spend.
How much is a rent roll worth in Australia?
A rent roll is valued as a multiple of its annual management income, the recurring management fees the book generates each year. There is no single market multiple: tightly held metropolitan books attract higher multiples and regional or fee-discounted books lower ones. Published broker figures differ by city, source and year, so the multiple for a specific book should come from comparable sales current at the valuation date.
How much is a SaaS business worth in Australia?
A SaaS business in Australia is valued as a multiple of recurring revenue or of earnings, and which one a buyer uses depends mostly on size. SaaS Capital estimated in January 2025 that private SaaS companies would be priced at about 4.8 times annual recurring revenue if bootstrapped and 5.3 times if equity-backed. Those are modelled estimates from its survey data, not observed sale prices.
How much is a transport or logistics business worth in Australia?
An Australian transport or logistics business is valued by reconciling two figures: an earnings-based value using a normalised EBITDA multiple, and an asset-based Net Asset Value built from the secondhand market value of the fleet. Such businesses generally change hands at 2 to 5 times normalised EBITDA across size bands, with asset-heavy fleet operators toward the lower end and asset-light, contracted freight businesses toward the top.
How much is a transport or logistics business worth in Australia?
How much is a vet clinic worth in Australia?
A vet clinic valuation in Australia typically supports 2.5 to 4 times EBITDA for a solo owner-vet practice, rising to roughly 5.5 to 7 times for a multi-vet, associate-driven clinic, and to about 8 times where a corporate consolidator is genuinely competing for it. Consolidator platform deals run higher but price scale, not a single clinic. Headline sale prices come from platform-level private equity transactions, so they are not a benchmark for what an individual practice is worth.
How much is an accounting practice worth in Australia?
An Australian accounting practice is normally priced as cents for each dollar of annual fees, depending on how many fees remain once the owner leaves. The traditional benchmark, per one business broker's 2024 guide, was one dollar for each dollar of fees. One specialist broker's figures, quoted by CPA Australia in July 2025, put recent averages at about 113 cents for metro practices with fees under $1 million and 109 cents for regional practices.
How much is an ecommerce business worth in Australia?
An Australian ecommerce business is typically worth 2.0 to 3.5 times Seller's Discretionary Earnings (SDE) below $1m revenue, moving to 4.0 to 8.0 times EBITDA above $5m. The exact position within that spread is set mainly by marketplace dependence, inventory quality and owned-audience assets rather than profit alone.
How much is an insurance broking business worth in Australia?
An insurance broking business is worth what its renewing commission and fee income is worth to a buyer once the current owner steps back. A client book is commonly quoted as a multiple of recurring income and a licensed brokerage as a multiple of normalised earnings, while an underwriting agency is priced on its binder. Neither convention is a benchmark.
How much is an IT services or MSP business worth in Australia?
An Australian IT services or managed services provider (MSP) is typically valued on normalised EBITDA, with an indicative multiple of roughly 3.0x to 6.5x depending on EBITDA size band and the quality of the revenue behind it. The multiple is not applied to the top line. Two businesses with identical total revenue and identical EBITDA can have genuinely different market values because the revenue mix differs.
How much is an IT services or MSP business worth in Australia?
How much is an NDIS provider worth in Australia?
An NDIS provider business is normally priced as a multiple of maintainable earnings, meaning EBITDA after a market wage has been charged for whoever runs it. A reliable public source of settled sale prices could not be found, and advertised asking prices are opening positions rather than evidence of what settled, so no multiple is quoted and the multiple depends on the provider, not a sector average.
What multiple do pilates studios sell for in Australia?
Owner-operated studios commonly sell at roughly 1.5 to 2.5 times adjusted owner earnings. Strong recurring memberships, a team that runs the timetable without the owner and a long lease push a studio to the top of the range; founder dependence, heavy reliance on prepaid packs and a short lease push it to the bottom or below. Multi-site studios run under management are valued on normalised EBITDA and trade higher.
How much is a pilates studio worth in Australia? The class book, not the reformers, sets the price.
Tax, capital gains and the ATO
Will the ATO accept my business valuation?
No valuation is "ATO-approved": the ATO does not pre-approve valuations from any firm. What matters is whether the valuation is prepared with the ATO's market valuation guidance in mind: a qualified, independent valuer, disclosed assumptions, appropriate methods and documented evidence. How the resulting value is treated for tax remains a matter for your accountant or adviser.
Can the ATO reject a valuation prepared by a qualified valuer?
Yes. Qualification helps, but the ATO assesses the report, not the letterhead. A report that does not document its evidence, uses an inappropriate method or values the wrong date can be rejected regardless of who prepared it.
Can I value the business myself for CGT?
Nothing prevents a taxpayer preparing their own valuation, but the ATO's guidance expects independence and competence, and a self-prepared figure is the easiest kind to challenge. For a small business CGT concession claim in particular, an independent signed report is the practical standard.
How long is a valuation valid for?
A valuation speaks as at its valuation date. For a CGT event the date has to match the event, so a valuation prepared months earlier or later will not do. Retrospective valuations at a past date are possible and are priced as a fixed add-on.
Do I need a registered business valuer for the ATO?
No, because no such register exists. The ATO's market valuation guidance does not require a particular credential. It expects a valuer with qualifications and experience appropriate to the asset and the purpose, independence from the parties, and a report that sets out the method, evidence and reasoning clearly enough for another valuer to follow.
Who Can Value a Business in Australia? Qualifications, Credentials and How to Vet a Valuer
Do I need a formal valuation to claim the small business CGT concessions in Australia?
A formal valuation is not always legally required to claim the small business CGT concessions. The eligibility tests in Division 152 of the ITAA 1997 turn on market value, the taxpayer self-assesses, and the taxpayer must be able to show how the value was arrived at if the ATO asks. Whether an estimate is enough depends on which eligibility gateway is relied on and how much room for error the numbers leave.
Do I need a formal valuation to claim the small business CGT concessions?
What is the valuation date for a CGT valuation of a business in Australia?
For most business and share sales, the CGT valuation date is the contract date, not settlement. Under CGT event A1 (ITAA 1997 s 104-10), the event happens when the contract for disposal is entered into, and where there is no contract, when the change of ownership occurs. A valuation prepared as at settlement date, when the operative date is the contract date, is valuing the wrong point in time.
Choosing the valuation date: why it changes your CGT outcome.
What is the $6 million maximum net asset value test when selling a business?
The MNAV test under Div 152 ITAA 1997 requires the market value of the net CGT assets of the taxpayer, connected entities and affiliates to not exceed $6 million just before the CGT event. The threshold is not indexed. The alternative gateway is the CGT small business entity test, aggregated turnover under $2 million. Both turn on substantiated values, and your accountant confirms the legal application.
Selling, buying, partners and shareholders
Do I need a business valuation before selling my business?
There is no legal requirement, but the asking price anchors every downstream outcome: negotiation, time on market and the tax position that crystallises at contract. An independent valuation sets a defensible range before a broker or buyer sets it for you, and pre-tests small business CGT concession eligibility while the sale structure can still be adjusted.
Do I need a business valuation before buying a business?
There is no legal requirement, but the asking price is the vendor's number and the add-backs behind it are the vendor's claims. An independent valuation tests both against source documents and market evidence before you are committed. Lenders frequently ask for one too: an evidence-led report answers the bank's question as well as yours.
How do you value a partner's share of a business?
The firm is valued first using accepted methodologies: typically capitalised future maintainable earnings for trading practices, with asset-based methods tested where relevant. The fractional interest is then valued in light of the deed, the rights attached to the interest, and whether control and marketability discounts apply in the specific context. The report concludes at the most supportable position within the supportable range.
How do you value shares in a private company in Australia?
Shares in a private company are valued as a two-step exercise. First the enterprise value of the business is established, using methods such as capitalisation of maintainable earnings, EBITDA or revenue multiples, net asset value or discounted cash flow. That figure is then bridged to the value of the equity and to the specific parcel, because a shareholding is not simply a percentage slice of the headline number.
How much discount applies to a minority shareholding in a private company in Australia?
There is no Australian statutory table of minority discounts. Concluded discounts for lack of control on private minority parcels commonly fall between 10 and 35 per cent, depending on the rights attaching to the parcel. Combined discounts over 50 per cent exist in practice but demand unusually strong evidence.
Minority interest discounts in Australia: DLOM and DLOC explained, with typical ranges.
What is an earn-out worth in a business sale in Australia?
An earn-out in a business sale is worth its risk-adjusted value, not its face value. An $800k earn-out with a 90% chance of being paid in full is worth something close to $720k in present-value terms, before discounting for the time delay. With a 40% chance of being paid in full, it is worth closer to $320k, and arguably less once the buyer's incentive to under-deliver is factored in.
How does vendor finance affect the real price of a business sale in Australia?
A headline sale price that includes a vendor finance tranche is not the price the vendor actually receives. Vendor finance is where the seller leaves part of the agreed price in the business at completion and the buyer repays it over time out of future trading. For example, a sale advertised at $2m with $1.2m paid at completion and $800k carried by the vendor over three years is not, economically, a $2m sale.
How can I increase the value of my business before selling it?
To increase a business's value before selling, an owner can pull one of two levers: grow maintainable earnings, or increase the multiple a buyer is willing to pay for those earnings. The multiple is set by how risky the earnings look to a buyer, not by their size. Reducing owner-dependence risk can move the multiple more than growing earnings while the risk profile stays the same.
Does market value apply when I transfer my business to my children in Australia?
Market value applies to a family business transfer in Australia even when little or no money changes hands. Where the parties do not deal at arm's length, s 116-30 of the ITAA 1997 substitutes market value for the actual proceeds. The parent is assessed as though they sold at market value on the transfer date, whatever the family actually paid.
Valuing a business for family succession: getting the price right when you're not really selling.
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