SMSF Property Valuations

SMSF Property Valuations, usually based on the market value of the property, is required by Self Managed Superannuation Fund trustees to prepare compliant financial accounts and statements. SMSF Property Valuations prepared by an independent valuer is the best piece of objective data to support a value.  

When is a SMSF Property Valuation Required?

A SMSF Property Valuation may not be needed every year (at 30 June) unless a significant event (i.e. natural disaster, market volatility, macroeconomic events or changes to the character of the asset) occurred that requires a review of the last valuation.

Who Can Carry Out SMSF Property Valuations?

Generally SMSF Property Valuations for residential property can be carried out by a property expert or someone who specialises in that area, such as a real estate agent or someone who’s very knowledgeable in that market, but they still have to follow the SMSF Property Valuation guidelines of the Australian Taxation Office (ATO).

For commercial properties, SMSF Property Valuations by a professional valuer experienced in such properties holds more weight than an assessment from a trustee, a related party of the fund, real estate agent or someone who has a vested interest in the property. A real estate agent's free appraisal is legally not and cannot be considered a valuation.  Assessing the market value of a commercial property is much more demanding, requiring at least two valuation methods.  An experienced and  accredited valuer of a recognised professional body such as the Australian Property Institute or Australian Valuers Institute is the correct property expert to engage to avoid unnecessary auditing issues raised by an auditor and the ATO.

Your SMSF Property Valuation must Conform to ATO Requirements

The auditor or ATO may ask you to provide evidence of the SMSF Property Valuation method used to decide whether to accept the valuation or not.  The valuation must conform to the ATO's guide or market valuation for tax purposes and is based on objective and supportable data. If the most appropriate valuation method was not used for valuing the SMSF property assets, ATO will not accept the valuation. Furthermore, your SMSF property valuation must not be different for the corresponding capital gains tax event.

Your Best Option for Your SMSF Property Valuation

To avoid unnecessay financial cost and / or time lost, a rigorous valuation by a Certified Practising Valuer is your best option.

According to legal precedent, experts who assess market value should have specific knowledge, experience and judgement in that particular field. Coupled with this, the valuer undertaking your SMSF Property Valuation should also display personal integrity and competence. He or she should be independent of the interests of the instructing party.

<The Essential Guide to SMSF Property Valuation in Melbourne>