Does an SMSF need a new property valuation every single year?

Assets must be reported at market value every year, but a full valuation is not automatically required annually for straightforward residential property — the auditor must simply be satisfied the figure is supportable. For commercial, related-party or unusual property, a current independent valuation each year is the safe position.

Can a trustee or a member value the fund’s property?

No. The valuation must be independent of the fund, its members and its related parties. A valuer with any interest in the property cannot provide it.

What if the auditor rejects the valuation we already have?

We can prepare a report effective 30 June of the relevant year retrospectively. It is more work than valuing at the time, so instruct as early as you can once the issue is raised.

Does the fund need a market rent assessment as well?

Where the property is leased to a related party, yes — the auditor will want the rent tested against market as well as the capital value. We can provide both in one engagement.

SMSF 30 June Property Valuation Checklist

What the rules actually require

Regulation 8.02B of the SIS Regulations requires fund assets to be valued at market value when preparing accounts and statements. The ATO expects trustees to use objective and supportable data. The auditor, separately, must obtain sufficient appropriate evidence that the reported value is reasonable — and it is the auditor, not the trustee, who decides whether what they have been given is enough.

Note what the rule does not say: it does not mandate a full independent valuation by an external valuer every single year. It mandates market value supported by objective and supportable evidence, and s35B(2) of the SIS Act requires the accounts to reflect it. For a straightforward residential property an auditor may accept other evidence in some years; for commercial property, related-party arrangements or anything unusual, a current independent valuation is the only reliably safe position.

What is no longer safe is leaving a figure unchanged. In 2024 the ATO wrote to more than 16,500 SMSFs that had reported property at the same value for three or more consecutive years, and to the auditors of those funds. An unchanged value is now itself a flag, whether or not it happens to be correct.

"Assets must be valued at market value in the accounts and statements of a self-managed superannuation fund."

Eight events that require a valuation

Some are annual; others are one-off events an auditor will look for specifically.

What makes an auditor qualify the report

These are the reasons we are asked to prepare a valuation after an audit has already begun — the expensive way to do it.

Audit red flags and their remedy

Getting the timing right

The effective date must be 30 June of the relevant financial year, and the valuation should be commissioned close to it rather than long afterwards. A report effective 30 June but prepared in September is entirely normal and acceptable; a report effective in March and used for the June accounts is not.

Practically: instruct in May or June, so inspection and the report both land inside a sensible window. We send the signed PDF to the trustee and, on request, directly to the accountant and the auditor, so the audit file is complete without anyone forwarding attachments.

Questions we are asked about this

Keep reading

The eight components of a report that withstands review, and the four reasons reports get questioned.

Why an agent appraisal is not substantiation, and what the difference costs when the ATO reviews a return.