SMSF property valuations can be confusing. This is partly because there are no hard and fast rules. An external valuation of real property is not required each year, but the decision as to whether to seek an independent valuation should be at least reviewed every year. The valuation approach will be examined by the fund auditor each year.
A general rule of thumb is that it would appear reasonable to have an independent external valuation at least every 3 years.
In determining whether an external valuation is required more often the things to consider are:
- The value of the property in proportion to the fund’s overall value.
- significant changes in market conditions,
- an event has that may have affected the value of the property such as a natural disaster.
A SMSF property valuation may be undertaken by anyone. From an auditor’s perspective, something from an independent party such as an independent valuer holds a lot more weight than something from a trustee of a SMSF.