How to value Property in your SMSF
All Self-Managed Superannuation Funds that hold property as an asset class must report to the ATO each year the market value of each property held.
The ATO does not require trustees to get a formal valuation each and every year. Traditionally real estate agents provide SMSF trustees with market appraisals on property of which the trustees pass on to their auditors. These market appraisals are an approximation of the current rates for either leasing or selling of the property at that point in time.
The ATO has recently made comment that in the event of major market changes, substantial renovations or severe weather events a formal valuation from a Certified Practicing Valuer is preferred.
They also acknowledged the complexities of valuing Commercial Property particularly when such property is vacant as the traditional Capitalisation of Net Market Income method becomes void.