AAS Blog

Getting SMSF property valuations right

April 2023

Since 2013 Trustees of SMSF’s have had to value all their assets at market value when preparing financial statements. With the introduction of Total Super Balance and Transfer Balance Cap reporting there has been an increased emphasis from SMSF Auditors (and the ATO) on unlisted investments to ensure that they are valued at market value and in particular property investments.

When valuing real property, the following factors would be taken into consideration

  • The value of similar properties (on a square metre basis in the area)
  • The amount that was paid for the property in an arm's length market
  • Independent appraisal
  • Whether the property has undergone improvements since it was last valued
  • Net income yields – for commercial properties.

In practical terms AAS will often obtain an online valuation for a residential property using RPD Data.

For apartments and commercial properties online valuations are generally more difficult as RPD data does not have the information to provide the valuations.

For apartments and commercial properties it is therefore is often best (and easier) for Trustees to get a valuation from a local estate agent each 30 June. From experience this process is fairly easy as most local estate agents are keen assist and build a relationship with potential future clients.

Note whilst, an external valuation of real property is not required each year, a recent valuation would be prudent if the Trustees expect that the valuation is now materially inaccurate, or an event occurred that may have affected the value of the property since it was last valued (i.e. market conditions have changed or a natural disaster).

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