How Often Should a Self-Managed Super Fund Value Its Property?

Self-managed super funds (SMSFs) are becoming increasingly popular among Australians as a way to save for retirement. One of the key features of SMSFs is the ability to invest in a wide range of assets, including property. However, with this flexibility comes a certain level of responsibility, and it is important for SMSF trustees to ensure that they are valuing their property assets appropriately.

The frequency with which SMSF trustees should value their property assets is a matter of debate. The Australian Taxation Office (ATO) does not provide specific guidance on this issue, and different experts have different opinions. However, there are a few key considerations that SMSF trustees should keep in mind when determining how often to value their property assets.

Firstly, it is important to note that SMSF trustees are required to value their assets for the purpose of preparing their annual financial statements. This means that property assets should be valued at least once a year. The ATO also requires SMSF trustees to ensure that their assets are valued at market value, which is defined as the price that would be paid for the asset in an arm’s length transaction between a willing buyer and a willing seller.

Secondly, SMSF trustees should consider the liquidity of their property assets. Liquidity refers to how easily an asset can be converted into cash. Property is generally considered to be a relatively illiquid asset, as it can take time to sell. As such, SMSF trustees may choose to value their property assets less frequently than more liquid assets, such as shares.

Thirdly, SMSF trustees should consider the volatility of their property assets. Volatility refers to the degree to which an asset’s value fluctuates. Property values can fluctuate significantly depending on a number of factors, including economic conditions and changes in the local property market. As such, SMSF trustees may choose to value their property assets more frequently if they believe the value of the property is likely to change significantly in a short period of time.

Fourthly, SMSF trustees should consider the impact of any changes in the property on the value of the asset. For example, if the property has undergone significant renovations or improvements, it may be necessary to revalue the property to reflect the changes. Similarly, if the property has been damaged, it may be necessary to adjust the value accordingly.

Finally, SMSF trustees should consider any additional regulatory requirements. For example, if the SMSF is borrowing money to purchase a property, the lender may require the property to be valued at regular intervals to ensure that it continues to be sufficient security for the loan.

Overall, SMSF trustees should consider a number of factors when determining how often to value their property assets. While there is no specific guidance from the ATO, it is generally recommended that property assets are valued at least once a year, and more frequently if the value is likely to change significantly or if there are additional regulatory requirements.

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Why is SMSF Set up so affordable at SuperHelp?

SuperHelp has been servicing the SMSF market for over 15 years. We pride ourselves on being able to provide an affordable SMSF service without compromising on quality. One of these services is to provide new members with setting up their SMSF at an affordable fee when they use our award winning service.

Do I need to use a specific bank, broker or provider?

Unlike other SMSF administrators and accountants we do not restrict you to what bank, broker or service provider you use. We are independent and do not take any commissions from other parties so that our clients can invest their super where they please.

How long has SuperHelp been around for?

SuperHelp have been around since 2002 - so over 15 years! While new SMSF administrators have come and gone, we are still around!

Do you offer any other SMSF services?

Yes we do! You can see a full list of SMSF services on our services page.

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