Property Revaluation & SMSF

Do properties held by SMSF need to be revalued every year?

Currently, there is no specific legislation that requires properties held by SMSF to be revalued every year. However, independent SMSF auditor will require the financial statements presented to be a fair and accurate representation of the assets of the fund. The auditor must be provided with evidence that the valuation of any property held by SMSF is valued accurately enough for them to sign off on their audit report.

The general rule of thumb used by the majority of SMSF auditors is that property investments held by a SMSF must be valued at least every three years.

There are some situations where property held by a SMSF must be revalued on a more frequent basis:

  1. Commencement of Pension – a valuation from within 12 months prior to the commencement of the pension must be used.
  2. Where the SMSF has in-house assets and the auditor needs to ensure that the 5% in-house asset ratio has not been exceeded.

The most important and common situation from the above is when a pension is commenced. If the members are still contributing to the fund and potentially starting a new pension each year, the trustees will be required to undertake a valuation each year. This is explained in the Tax Determination TD2000/29.

Who can undertake the valuation?

Valuations can be conducted by;

  • Independent valuers
  • Real estate agents
  • Other unqualified persons(including trustees of the fund)

SMSF independent auditors generally will prefer a valuation from an independent party rather than the trustees of the SMSF. However, the auditor may accept the valuation from the trustees if the evidence is presented to show that the methodology used to prepare the valuation is objective, based on a reasonable process and all relevant factors have been considered.

For example, when determining the valuation of property, the following factors would be considered:

  • The value of similar properties
  •  How much was paid for the property
  • Valuation for council rates purposes
  • Independent appraisals
  • Rental yield

For SMSFs that hold residential properties and the trustees wish to prepare their own valuation, they should obtain either a sales history report or a suburb sales history report from RP Data. These reports are cheaper than full independent valuation, and they can form the basis for the valuation of the SMSF property.

For commercial, industrial and more unique properties held by SMSF, valuation process will be complex than residential properties. Auditors may require more detailed valuation evidence than the case for residential properties. In these cases, an independent appraisal obtained every three years would be appropriate.

Do you have any questions on properties held by SMSF?

Please call Superhelp for more information on 1300 736 453.

 

Article Disclaimer: This information should not be considered personal financial advice as it is intended to provide general advice only. The article has been prepared by Superhelp Australia Pty Ltd without taking into account your personal objectives, financial situations or needs. 
 
The information contained in the article may not be appropriate to your individual needs therefore you should seek personal financial advice before making any financial or investment decisions. 

 

Book Your Free SMSF Consultation

Book your free consultation with me to find out if SMSF is right for you. If you have any other questions, we are happy to help!

 

Sandra - SMSF Advisor

8 + 10 =

Why is SMSF Set up free at SuperHelp?

SuperHelp have been servicing the SMSF market for over 15 years. We pride ourselves in being able to provide an affordable SMSF service without compromising on quality. One of these services are to provide new members with setting up their SMSF for free 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!

I'm not sure if I want to start an SMSF, what should I do?

Starting an SMSF should not be taken lightly, we encourage you to book a free SMSF consultation with one of our expert staff to find out if SMSF is right for you. You can book a suitable time here or feel free to give us a call on 1300 756 453 during business hours.

How much is your ongoing annual administration fees?

Our first year introductory offer for new SMSF or transferred SMSF are $899 + GST regardless of asset types. Subsequent years are dependent on the number of assets and asset types you have – please use our calculator to estimate your fee. You will find that our fees are very reasonable to the quality provided within the SMSF market.

Do you have an SMSF newsletter that I can sign up to?

Yes! We send out a quarterly SMSF newsletter to all of our clients and anyone interested in SMSF. You can sign up here :

Do you offer any other SMSF services?

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

SMSF Trustee Trends – What Should You Look Out For?

As of June 2017, SMSFs (Self Managed Super Funds) are responsible for the largest portion of super funds in Australia. As of March 2017, there were approximately 1.13 million SMSF trustees running well over half a million (596,516) SMSFs. So what are the current SMSF...

Superannuation Withdrawal Tax – What You Need To Know

Nobody enjoys it much, but paying tax is a necessary thing. And it is the same with your superannuation. When you withdraw your superannuation you will more than likely need to pay tax on the payments you receive, however, the amount of tax you pay will be dependent...

Super Re-contribution Strategies

As of June 2017, SMSFs (Self Managed Super Funds) are responsible for the largest portion of super funds in Australia. As of March 2017, there were approximately 1.13 million SMSF trustees running well over half a million (596,516) SMSFs. So what are the current SMSF...

How to find lost super

One of the most common things we hear is that someone has lost their super - in other words, they have superannuation accounts that they no longer remember or have the details of and no longer contribute to. This is a common occurrence in the world of super because...

Allocated Pension versus Account Based Pension

Allocated Pensions is a partially outdated term that refers to an income stream provided by accumulated superannuation funds upon retirement. This type of pension was prevalent within an industry super fund, retail super fund or self managed superannuation fund (SMSF)...

When does an SMSF need/require an actuarial certificate?

There is often confusion around when an actuarial certificate is or isn’t needed for your SMSF. This article tries to clear up some of that confusion. First we will start by covering an important question - what is an actuarial certificate? This is a certificate used...

SMSF Sole Purpose Test

The sole purpose test is a test the ATO uses to ensure that SMSF trusts are operating with the intention of only benefitting from their funds through the sole purpose of either retirement or in the event of a member’s death. While the way that an SMSF manages its...

SMSF Commercial Property Purchase FAQ

  Can an SMSF buy a commercial property?   Yes. This is the method of property purchase that is allowable for SMSF. As laid out by the ATO you can only buy property through your SMSF if you comply with the following rules.   The property:     Must...

Are you thinking of investing in SMSF Collectibles?

Are you thinking about investing in collectibles for your SMSF? Or do you already have collectibles and want to ensure your investment is compliant? Wherever you are in the process of using collectibles in your SMSF investment strategy, this articles provides you with...

Updating Your SMSF Trust Deed

It is important to have a robust and up-to-date trust deed for your SMSF. Over the years there have been many changes to government requirements around how SMSFs are managed. Whenever the government make changes to SMSF regulations or requirements this is an essential...

Contact Us

SuperHelp is located in Macquarie Park, NSW however we work with clients all around Australia.

1300 756 453

PO Box 1906 Macquarie Centre NSW 2113

M-F: 9am-5pm, S-S: Closed