For trustees and their accountants
SMSF property valuations.
Every year your fund has to put a market value on the property it owns, and every year the same question comes up: what will the auditor actually accept? It is not a particular document and it is rarely the most expensive one. It is evidence that shows its workings - which is the part the cheap end of this market quietly leaves out.
The requirement, in short
Market value every year. Not a formal valuation every year.
A self-managed super fund has to report its assets at market value in its financial statements for each income year. Property is included, and there is no exemption that makes it every second or third year instead.
What the rule does not do is dictate who produces the figure. For real property, the test is whether the valuation is based on objective and supportable data - not whether a particular professional signed it. A registered valuer is recommended where the property is a large share of the fund, where the valuation is complex, or where something has made the number contentious. Outside those cases, documented evidence is what the year turns on.
The line that matters. The ATO lists an appraisal from an independent real estate agent among the evidence it accepts - and adds that where an appraisal is the only source being relied on, it should specify the supportable data behind it, such as the comparable sales used. An appraisal with its comparables attached is a strong document. The same figure with nothing behind it is the one that gets queried.
What counts as evidence, and what it is worth.
Six things trustees put in the file. They are not equal, and the difference is not what they cost - it is whether somebody reading the file can see how the number was reached.
Comparable sales in the same street or building
Strong
The closest thing to a market test there is: what similar property actually sold for, recently, nearby. The ATO names it first. Recency and genuine comparability are what carry it - a three-bedroom sale does not value a two-bedroom unit, and a sale from two years ago values nothing at all.
An appraisal from an independent real estate agent
Strong, with a condition
Explicitly acceptable, and this is the route most trustees have available for nothing. The condition matters: where the appraisal is the only source being relied on, it should set out the supportable data behind it. An appraisal that states a figure and shows no comparables is doing half the job.
A recent contract of sale
Strong, briefly
If the fund bought the property recently and nothing material has changed, the price it paid is evidence of market value. It ages, and it stops being enough the year after.
Net income yields, for commercial property
Strong for commercial
Commercial property is valued off what it earns, so the lease, the rent and the yield on comparable premises do the work that comparable sales do for a house. Not a substitute for anything on residential.
A rates notice or council valuation
Supporting only
Useful as corroboration, weak on its own. It is a rating valuation struck for a different purpose on a different date, and it routinely sits well under market. Put it in the file; do not build the file on it.
An online estimate with no workings
Weakest
An automated figure with no comparables shown is the item most likely to be queried, whatever was paid for the PDF it arrived in. Price is not the test - whether it shows its data is.
One item alone is usually thin. The stronger files carry two or three that agree with each other - an appraisal with its comparables, the sales it leaned on, and the lease showing what the property earns. Where they agree, there is very little left to argue about. Which document is sufficient in a given year is your auditor's call, and they are the person to ask.
On buying a report
The $85 PDF and what is actually in it.
Search this and you will find desktop SMSF valuation reports from about $85 to $245, most of them promising ATO compliance on the cover. Some are genuinely good. The ones at the bottom of that range are automated estimates dressed as documents: a figure produced from the same sales data anybody can pull, by someone who has not seen the property, sometimes without listing the comparables it used.
That last part is the problem. The strength of an appraisal, in the ATO's own framing, is in the supportable data behind it. A report that shows its comparables is worth having at any price. A report that shows a number is worth less than the free appraisal your managing agent would have written, and it cost you $85.
None of which is an argument against paying for a valuation when you need one. If the property is most of what your fund owns, or the figure is going to be contested, a registered valuer is money well spent and we will say so.
Three ways trustees lose the year
Reusing last year's number
The fund's accounts have to state market value for this year. A figure carried forward from last year's return is not evidence of this year's value, however sound it was when it was struck.
One document, no workings
A single figure from a single source, with nothing showing how it was reached, is the file that gets a question back. The ATO's guide points at several kinds of evidence for a reason - one on its own is usually thin.
Starting in September
Valuation evidence is dated evidence. Chasing it months after 30 June means reconstructing what the market looked like on a day that has passed, which is harder, and it is the reason so many funds end up paying for a retrospective report.
How we do it
A written appraisal, with the evidence attached.
We are a Brisbane property manager, not a valuation firm, and the appraisal we write is a licensed agent's assessment rather than a sworn valuation. What it has going for it is that we already know the building, the tenancy, and what comparable places actually leased for - not what they were advertised at.
If we manage the property
Every year, at no charge.
A written market and rental appraisal as at 30 June, with the comparable sales and rentals it was built from, dated. It arrives inside the end-of-year pack with the lease, the reconciled income and expenses, the invoices split between repairs and capital, and the inspection reports - sent to you and, if you want, straight to your accountant.
What else is in the pack →If we do not
Still free, still no obligation.
Any Brisbane property, whoever manages it. We will prepare the appraisal, list the comparables behind it, and send it to you - and if that is the only thing that ever comes of it, that is a fine outcome. Plenty of trustees use it to find out whether the rent their current agent set is still the market rate. It usually is not.
Ask for an appraisal →Outside Brisbane? We cannot help with the property, but the answer is not complicated: ask the agent who manages it for a written appraisal of market value and market rent, and insist it lists the comparable sales and rentals behind the figure. Most agencies will produce it for a managing owner without charging. Ask before June.
SMSF property valuation questions.
How often does an SMSF property need to be valued?
Every year. A fund's assets have to be reported at market value in its financial statements for each income year, and property is no exception - so there needs to be a defensible figure, supported by evidence, as at 30 June. What does not have to happen every year is a formal valuation by a registered valuer. For most funds in most years, current and objective evidence such as comparable sales and an agent appraisal that shows its workings is what the auditor is looking for.
Is it true you only need a valuation every three years?
This is the most persistent misunderstanding in the area, and relying on it is a bad idea. The requirement to report assets at market value applies to every income year - there is no three-year exemption from that. What is true is that you do not need a fresh independent valuation every year, and that is where the idea seems to have come from. Treat the reporting obligation as annual and the question of who produces the evidence as the thing that varies.
Does it have to be a registered or sworn valuer?
Not for real property in the ordinary case. The ATO's position is that the valuation needs to be based on objective and supportable data, not that it must come from a particular profession - and it names an appraisal from an independent real estate agent among the evidence it accepts. An independent qualified valuer is recommended rather than required, and the circumstances that push you toward one are where the property is a significant proportion of the fund's assets, where the valuation is genuinely complex, or where something specific has happened that makes the figure contentious. Collectables and personal-use assets are the exception: those do require a qualified independent valuer.
Can the trustees just value the property themselves?
Trustees are responsible for the valuation, so in that sense it is always yours. But your own opinion of what the place is worth is not evidence, and an auditor cannot accept it as such. What makes a trustee-determined figure stand up is the material underneath it - the comparable sales, the appraisal, the lease - which is why the practical answer is to have someone independent produce that material for you.
What does an SMSF property valuation cost?
The desktop reports sold for this purpose sit roughly between $85 and $245 depending on the provider and the turnaround. A full valuation by a registered valuer is several hundred dollars and up. For a property LINK Living manages, the annual market and rental appraisal costs nothing - it is part of the service and it arrives with the end-of-year pack. For a Brisbane property we do not manage, an appraisal is still free and carries no obligation.
Is an appraisal the same thing as a valuation?
No, and anyone who tells you otherwise is selling something. A sworn or certified valuation is a formal document prepared by a registered valuer who carries professional liability for the figure. An appraisal is a licensed agent's assessment of market value based on comparable evidence. The distinction matters legally, and it matters less than people expect for annual SMSF reporting - because what the fund needs is supportable evidence of market value, and a documented appraisal is expressly among the things that provides it. Where a certified valuation is genuinely required, we will tell you so rather than let an appraisal stand in for one.
Do I need a rental valuation as well as a market value?
For a tenanted property, effectively yes, and funds routinely forget the second one. The market value goes into the fund's accounts. The rent matters separately, because income to the fund has to be arm's length and that is something you evidence rather than assert - which means keeping the comparable rentals each figure was set from. Both belong in the same annual file, which is how we prepare them.
What happens if the fund cannot support its valuation?
The auditor has to obtain sufficient appropriate evidence for the value of the fund's investments. If it is not there, the likely outcomes are a question back to you, a qualified audit report, and - where the shortfall amounts to a reportable contravention - an auditor contravention report to the ATO. None of that is a catastrophe on its own, and all of it is avoidable by having the evidence dated and on file before the audit starts.
Can I get a valuation for a prior year I have already missed?
A retrospective appraisal is possible - the sales evidence for a past period still exists - and several providers sell exactly that. It is more work, it is weaker than evidence gathered at the time, and it costs more. If you are behind, deal with it rather than leave the gap, and then get in front of the next 30 June.
Does this work the same way for commercial property?
The obligation is identical; the method is not. Commercial value is driven by income, so the evidence is the lease, the passing rent, the outgoings and the yields on comparable premises rather than a set of house sales. Business real property leased to a member's own business is also the arrangement auditors look at hardest, precisely because the rent has to be at market rate - so the rent evidence carries more weight there than anywhere else.
My property is not in Brisbane. What should I ask for?
Ask the agent who manages it for a written appraisal of market value and market rent, and insist it lists the comparable sales and rentals it was built from, with their dates and addresses. Any competent agency can produce it and most will not charge a managing owner for it. If what comes back is a number in an email with no comparables attached, send it back - that is the version that gets queried.
Get the number, and the evidence behind it.
Tell us what the fund owns and we will prepare a written market and rental appraisal with the comparables attached. Free, no obligation, and yours to hand to your accountant whatever you decide about us.
About this page. LINK Living is a licensed real estate agency. We are not registered valuers, and a market appraisal is not a sworn or certified valuation. We are also not licensed to give financial or taxation advice, and nothing here is advice about your fund. Superannuation requirements are detailed, they are applied by your auditor to your circumstances, and they change - what is written above is general information to help you ask your accountant, adviser and auditor better questions, not a substitute for asking them. Where the answer affects the fund, get it in writing from someone licensed to give it.