While attending the SMSF Association National Conference earlier this month, our valuers picked up on some common questions around SMSF property valuations. One of the most frequently asked – should I get a valuation for my SMSF property asset?
We asked Opteon State Director – NSW/ACT/QLD, Sally Dale, to help answer this, and other SMSF property valuation FAQ’s for you.
Q: Why do I need a valuation for my SMSF property asset?
Sally: If you have property assets in a SMSF, or advising clients who do, then you may be required to schedule regular independent valuations of the property by a qualified valuer.
Why? Because SMSF managers must prepare annual financial accounts and statements. These accounts, must include the market value of any property asset in a SMSF.
A professional, independent valuation provides industry professionals with objective data that can be used by the SMSF auditor to sign off on the financial statements.
Q: When am I supposed to get a valuation for my SMSF property assets?
Sally: You may require the services of a valuer if the SMSF property asset makes up a large proportion of the fund, or if the property is a complex asset which requires detailed analysis.
You may also require a valuation if the value of the property has materially changed, or an event has occurred which could impact the value. This may include a shift in property market conditions or a natural disaster.
Changes to personal circumstances, such as starting a pension, may also require an updated valuation.
Q: How often do I need a valuation for my SMSF property assets?
Sally: Superannuation auditors will usually an external valuation of any property assets in a SMSF every three years. In most instances, for the two years in between, Opteon can conduct an AMA (Analysed Market Assessment) to determine the property’s value and provide a written report.
I’d agree with many of our visitors at the SMSF Association National Conference – it might seem like there are a lot of “may requires” and unique circumstances, and not a lot of concrete “you need to do this now” when it comes to SMSF property valuations. The best way to ensure you are 100% compliant is to obtain a formal valuation completed by a fully qualified valuation professional.
If you have any questions about when, why or how often you need to get a valuation, please get in touch with us at Opteon.