What regulation 8.02B actually requires
SIS regulation 8.02B requires an SMSF's assets to be reported at market value in the fund's accounts and statements for each income year. The regulation does not require a full valuation from a registered valuer every single year, but it does require the reported figure to be supported by objective and supportable data.
The ATO's guidance is clear that a trustee's own estimate, an old purchase price, or a council rating notice is not sufficient on its own for property. The practical result is that most funds holding real property obtain an independent valuation, then support it in intervening years with a documented review.
How often a fund really needs a new valuation
An external valuation is expected where the property represents a significant proportion of the fund's assets, where the market has moved materially, or where a specific event occurs — a pension commencing, a member benefit being paid, an in-specie transfer, or the fund being wound up.
For a stable residential holding in a steady market, a documented annual review referencing an independent valuation obtained within the last three years is commonly accepted. Your auditor sets the expectation; we can write the report to suit the cycle they have asked for.
What causes auditors to reject a value
Rejections almost never turn on the valuer's figure. They turn on what is missing around it.
No named valuer, or a valuer without API accreditationAn appraisal from the agent who manages the property for the fundNo comparable sales evidence attachedA valuation date that does not align with 30 JuneRelated-party property valued without acknowledging the relationshipA single figure with no methodology or assumptions statedWhere the fund holds business real property leased to a related party, expect the auditor to look closely at both the capital value and the rent. We can address both in one report.
Commercial and business real property
Commercial holdings are the most common source of SMSF valuation difficulty because value is driven by the lease as much as by the building. A valuation needs to test the passing rent against market rent, and to state the capitalisation rate applied and why.
Where the tenant is a related party, the arm's length nature of the lease is squarely in scope. A valuation that quietly accepts the rent the fund is charging itself is exactly the kind of report that generates an audit qualification.
The evidence pack we provide
Every SMSF report is written to be handed straight to the auditor without a covering explanation: valuation as at the relevant date, methodology, comparable sales and lettings, assumptions, and the signature and API details of the Certified Practising Valuer who prepared it.
Where a fund holds several properties, we run them as a single engagement with one schedule and one invoice, so the trustee is not chasing four separate reports in September.
Common questions
Can trustees value the fund's property themselves?
A trustee may determine the value, but it must be based on objective and supportable evidence. For real property, that in practice means an independent valuation or a documented review referencing one. Most auditors will not accept a trustee estimate alone.
Does the valuation have to be dated 30 June?
It should be as at 30 June for annual reporting purposes. Valuations obtained close to year end can usually be written as at 30 June where nothing material has changed, and we will state that assumption clearly.
Do you value the property or the fund's share of it?
Both are possible. Where the fund holds a part interest, we value the whole property and state the fund's proportionate interest, noting any discount considerations the auditor should be aware of.
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