SMSF Property Valuation: a Brief Overview
SMSF property valuation provided by SMSF trustees was required every three years prior to 1 July 2012. This was done on the basis that asset valuations, particularly for real estate, do not change considerably every year and that doing so would be expensive and time-consuming. But since then, the market value of your property must now be reported annually together with supporting evidence.
The property value must, however, be taken into account by the SMSF trustee on an annual basis. This is crucial for residential property estate in certain areas, that may be going through a period of rapid short-term growth.
Who should conduct the appraisal / valuation?
The trustee's assets may not necessarily need to be valued by a Certified Practising Valuer, despite the fact that this work can be challenging. A real estate agent's appraisal or even the SMSF trustee's could be used to value real estate.
In the case of an ATO review, the evidence used to support the appraisal or SMSF property valuation is what is important, not the person who signed the valuation. A Certified Practising Valuer would undoubtedly provide more support for their valuation, but this does not guarantee that their valuation is accurate. The ATO will examine the content of the valuation report rather than just the letterhead because the scope of the valuation for a Certified Practising Valuer can be something other than market value. <More>
When is an SMSF Valuation important?
The asset's valuation is comparatively insignificant for many SMSF trustees. The fact that an asset is owned by SMSF members remains true regardless of its value; capital growth has no bearing on this.
However, during some significant occurrences, the asset value affects the fund's tax profile. These significant historical occurrences include:
When valuing a property for an SMSF, both the market value and market rent can be determined; however, if leases are in place, the rent must be at market rental levels.
Why appoint AskTheValuer for your SMSF Valuation?
You will be getting more than a 'standard valuation'. A Hidden Value Property Check-Up will be included as a bonus.
The valuation for the SMSF audit will be performed by the independent Principal Valuer @ AskTheValuer, a very experienced, skillful and knowledgeable professional who has done numerous such valuations in over 15 years. For more details about the valuer, go to <About>.
