As property values change, ensuring accurate and compliant valuations is more important than ever for trustees. They are now increasingly turning to professional valuers to ensure their SMSFs comply with ATO regulations. With this increased focus on SMSF property assets, here are some tips to help ensure your fund remains compliant when it comes to property valuations.
1. Prioritise Annual Review of SMSF Property Assets
It’s essential to have your SMSF properties valued regularly, especially with the changing property market conditions. Set a reminder to review your portfolio each year to ensure your property values are up to date. Document the dates of the valuation and plan ahead for new valuation reports, this should avoid triggering ATO reviews and maintain compliance.
2. Use Accredited, Independent Valuers
Don’t rely on free online tools or informal estimates from real estate agents, as they often won’t meet ATO guidelines. Instead, choose qualified, independent valuers who can provide detailed, professional reports that meet all the necessary requirements by outlining the objective data used, market research, comparable sales, and valuation methods. Importantly, a qualified property professional will prepare your report if there are any queries or additional assistance is required.
3. Monitor ATO Guidelines for SMSF Valuations
The ATO’s rules regarding SMSF property valuations can change, and more will be revealed about the proposed Division 296 tax impacting SMSF values. Stay updated on the latest regulations and ensure your valuation methods align with the current requirements.
4. Budget for Professional Valuations
Be proactive by including valuation costs in your SMSF’s annual budget to ensure you’re not caught off guard by unexpected expenses. This will allow you to consistently comply with ATO guidelines and avoid additional costs or time delays. Often, reports commissioned with firms that do not understand the requirements require review and amendments, leading to additional fees.
5. Be Aware of Market-Specific Challenges
Professional valuations become even more critical for commercial or specialised properties where there may be limited sales evidence. Engaging an experienced valuer ensures a more accurate assessment based on the latest available data.
6. Keep Good Records & Prepare for Audit
When preparing for your SMSF audit, ensure you have a professional valuation ready or detailed records of how you arrived at your property valuations, including the data sources, methods used, comparable evidence, and any reasoning behind decisions. Good documentation is key if the ATO comes knocking for an audit—it shows you’re staying compliant and making informed decisions.
Did you know?
By engaging Acumentis to provide a valuation for your SMSF-held property, you will receive a comprehensive valuation report detailing the property's value, factors affecting the valuation, and a summary of the methodology used.
Order your SMSF assessment today or contact our team to discuss.