A market rent valuation (also called a rental determination or rental assessment) is an independent valuer’s opinion of the fair market rent for a property — what it would reasonably let for on the open market at a given date. It answers a different question from a sale valuation: not “what is this worth to buy?” but “what is this worth to rent?”
When you need one#
- Lease rent reviews. Many commercial and retail leases have a market rent review clause. When the review falls due, an independent determination settles the new rent on evidence rather than argument.
- Related-party leases. When a business or an SMSF leases property to a related party, the rent generally has to be at an arm’s-length market rate — an independent market rent valuation is the evidence that it is.
- Landlord–tenant disputes. Where the parties can’t agree on a review, a neutral determination gives both sides a defensible figure.
- Setting a new lease. Before signing, either party may want an independent view of the market rent.
- Family or informal arrangements. Renting to family or between related entities, where there’s no arm’s-length negotiation to set the rent.
Related-party and SMSF leases#
For an SMSF, business real property leased to a related party must be on genuine market terms — the rent has to reflect what an unrelated tenant would pay. An independent market rent valuation provides that evidence for the fund’s records and its auditor. SMSF-specific compliance is handled by the specialist SMSF property valuation service; the same independence and standards apply.
How it differs from a capital value valuation#
A capital (sale) value valuation assesses what the property would sell for; a market rent valuation assesses what it would let for — expressed as rent per annum, or per square metre for commercial space. The two use different evidence:
| Capital value valuation | Market rent valuation | |
|---|---|---|
| Question answered | What it’s worth to buy | What it’s worth to rent |
| Expressed as | A market value figure | Rent (p.a., or per m²) |
| Main evidence | Comparable sales | Comparable lettings |
| Common uses | CGT, sale, estate, family law, transfer | Rent reviews, related-party leases, disputes |
If you need a capital value instead — for tax, sale or a settlement — see what is a property valuation and the relevant purpose guides (CGT, family law, transfers).
Desktop or on-site?#
A rental assessment for a standard property with good letting evidence can be prepared on a desktop basis; specialised, retail or higher-stakes premises may warrant an inspection so the valuer sees condition, fit-out and features first-hand. We confirm the right pathway and a fixed price before you proceed.
Common questions#
What is a market rent valuation?
How is market rent different from a property valuation?
When do I need a rental determination?
Do SMSF related-party leases need a market rent valuation?
Can you value both the rent and the capital value?
Is a market rent valuation independent?
Related guides: what is a property valuation · independent property valuer · property valuation vs appraisal · desktop vs on-site.
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General information only — not tax, financial or legal advice. The signed valuation is provided by a qualified valuer.