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Does your SMSF own property? If you own property through your Self Managed Superannuation Fund (“SMSF”), your Auditor may ask you to justify the value of the property in your SMSF’s accounts. Determining the market value of residential or commercial property held in your SMSF is an important component of your annual SMSF compliance maintenance. One of the easiest and most reliable ways of doing this is to have a restricted property assessment conducted by independent and qualified property valuers.
What is a SMSF restricted property assessment? It is a desktop assessment completed by qualified valuation professionals. They use real-time sales and leasing data that ensures an accurate and timely review. The assessment assists a trustee in ascribing the market value of the SMSF asset, based on objective and supportable data utilising the appropriate methodology.
When and how often is it required?
Frequency: In accordance with ATO requirements, SMSFs are audited on an annual basis. It is best practice to ensure you rely on current and relevant information to assist.
Due Date: To comply with relevant super law the market value of an asset as at 30 June is required to be reported by the trustee on an annual basis.
Why is it required? All SMSFs are required to provide a market value of assets held in their fund. ATO recommends engaging an independent valuation of properties that are owned within an SMSF especially: * after a “significant event” which may include macroeconomic events, market volatility or natural disasters. COVID-19 could be considered a significant event and the trustees are recommended to take this into consideration when preparing this year’s financial reports. * if either the value of the assets represents a significant proportion of the fund’s value or the nature of the asset indicates that the valuation is likely to be complex or difficult. e.g. If it is a land-rich investment property, a number of different approaches may be required to determine what is the highest and best use for that property.
What are some of the obstacles SMSF trustees could encounter if real estate agents are engaged to conduct the valuation of properties? A common hurdle encountered is gaining access to current and relevant supporting data to demonstrate market value comparison. The cost and timing associated with obtaining third-party advice concerning this task however is often the biggest hurdle.
How do I arrange a restricted property assessment? Law Central has teamed up with Australia’s only independent, locally owned, ISO and IRAP certified, ASX listed property valuation and advisory firm, Acumentis, to provide our members access to a fixed price restricted property assessment service. With more than 300 property professionals delivering insightful advice across the nation from over 45 metropolitan and regional offices, Acumentis has more than 100 years of combined experience in the provision of property valuations and property intelligence nationwide.
How much does it cost?
Law Central has negotiated with Acumentis to provide a Restricted Property Assessment for residential property (where the property value is less than $1.5M) for only $315 (Inc GST) .
To order go to Law Central
For commercial properties (where the value is less than $2.5M and has 2 or less tenants), the cost is $695 (Inc GST). To order go to Law Central
For further questions contact Law Central
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