When assessing a property’s value, it is important to understand the difference between a property valuation and a property appraisal. While both are used in real estate transactions, their purpose, accuracy, and legal standing vary significantly.
What is a Property Valuation?
A property valuation is a formal, legally recognised report conducted by a certified property valuer. It provides an accurate market value assessment, often required for:
- Mortgage applications
- Taxation and stamp duty purposes
- Legal settlements, including divorce and probate cases
- Investment analysis
What is a Property Appraisal?
A property appraisal is an estimate of a property’s market value, usually provided by a real estate agent. It is commonly used for:
- Setting an asking price for property sales
- Understanding local market conditions
- Comparing recent sales in the area
Key Differences Between Property Valuation and Property Appraisal in NSW
| Feature | Property Valuation | Property Appraisal |
| Who Conducts It? | Certified property valuer | Real estate agent |
| Legal Recognition? | Yes – Used for taxation, legal, and mortgage purposes | No – Informal estimate |
| Level of Detail | Comprehensive report with data analysis | General price estimate |
| Purpose | Tax, legal, loan approval, investment | Selling or buying a property |
| Accuracy | Highly accurate and independent | Based on agent opinion and market trends |
When Should You Use a Property Valuation Instead of an Appraisal?
- When applying for a home loan or refinancing
- For legal settlements, including family law and deceased estates
- When calculating capital gains tax or stamp duty
- For investment purposes and risk assessment
Conclusion
While property appraisals provide an estimate of market value, property valuations in NSW are legally binding and essential for financial, legal, and taxation purposes. Engaging a professional property valuer ensures an accurate and compliant assessment.