SMSF Property Valuations

Are you aware that the Australian Taxation Office has made it mandatory for all properties held within SMSF's to have the Market Value confirmed every 12 months?

• Previously, the requirement was every 3 years
• This means that the Auditor of your Super Fund will only accept Valuations or Appraisals dated within 12 months of the 30th June date of the financial year being compiled.

Are you confused about when to obtain a Valuation versus an Appraisal?

• Auditors do not require a Full Valuation Report from a qualified valuer. An appraisal from a Real Estate Agent is sufficient, so long as comparable sales data is used and included to support the appraisal. The appraisal will also need to include a paragraph as to how they reached their market value e.g. price per acre, etc.
• Please be aware that the Real Estate Agent will charge a fee for the appraisal, which is to be paid out of your Super Fund. However, we don't generally require a full valuation - more so a one-page appraisal letter with the relevant details which will help to keep the costs to a minimum.
• If the comparable sales are not listed, the Auditor will not accept the appraisal.

Other

• If you have a related party Lease Agreement, the appraisal or valuation must also include a Market Lease Value, setting out price per acre or document how they arrived at their lease value.

What happens if you don't supply an updated Appraisal or Valuation?

• Where a valuation or appraisal is not provided or does not meet the required standard, Auditors are obligated to qualify either or both Part A and Part B of their audit report and lodge an audit contravention report to the ATO.

How can we help you?

• For most residential properties, we can order a valuation from Core Logic, however these online valuations are only accepted where the confidence level is medium or higher. This service is not available for commerical or rural properties.
• If the property valuation or appraisal meets the requirement - such as including comparable sales - our goal is to only provide an updated appraisal or valuation every 2 years. In the second year, instead of a new appraisal, we submit a property declaration, the previous year's appraisal (now 12 months old), and relevant rates notices to support the property's market value, along with a signed Minute by the Trustee to declare the property value hasn't changed.

What's my next step?

• If you are unsure whether we can order a valuation from Core Logic for your residential property, please feel free to contact us about this.
• If you have rural or commercial property, please ensure you contact a Real Estate Agent or Valuer to prepare an updated Market Value (as well as Lease Appraisal if required) for your property.
• Please add this to your checklist of documents to bring into our offices when compiling your Financials.
• We invite you to reach out with any comments or questions you may have.