When Do Self-Managed Superannuation Funds Need Property Valuations?
The value of all SMSF assets must be reported every year.
Current valuations are required for assets such as shares and managed funds. However, property valuations can carry over for some years – the rule of thumb is three years.
The Australian Taxation Office (ATO) valuation guidelines suggest a new property valuation if
- The previous valuation undertaken has become considerably or materially inaccurate, or
- A significant event, such as a natural disaster, market volatility, or a major renovation may have changed the asset’s value.
It is also advisable to do regular valuations if property forms a significant proportion of the self-managed super fund’s investments.
According to Australian Taxation Office statistics, over 30% of all SMSFs have invested in real property. Property assets are worth $147 billion and represent about 20% of all assets held by SMSFs.
And there’s good reason to invest in real property. ASIC’s Moneysmart website reports an average return of 6.3% per year over the last ten years. This can be compared to the 3-4% per year on fixed interest and 6.5% on shares for the same period.