Self-managed super funds (SMSFs) are an integral part of the Australian superannuation market, providing members with an alternative to large industry and retail super funds. SMSFs are managed by its members who are responsible for the fund’s decisions and for complying with tax, super and investment law.
At the end of each financial year, SMSF’s are required to prepare and have audited, financial statements that reflect the current market value of the asset held by the Fund. The auditor requires relevant evidence supporting the valuation of assets in order to provide an unqualified audit report. For some asset classes, such as term deposits or ASX listed shares, it is straight forward. However, some asset classes can be more involved.
Property is a popular asset held by SMSF’s. In addition to general investment properties, it is not uncommon for business owners to have their business premises owned by their SMSF. Over the years the ATO has updated its guidelines on the valuation of property held within SMSF’s.
The latest ATO guidelines on the valuation of property held within an SMSF require the party providing the valuation to base the valuation on objective and supportable data, which includes properly considering and documenting the basis of the valuation and providing evidence of the value of similar properties and recent comparable sales.
You should check with your accountant and SMSF auditor if your existing property valuation report meets the ATO requirements.
If you need an updated property assessment, contact IPN Valuers.