Updated ATO Guidance
In April 2025, the ATO released updated SMSF Valuation Guidance.
This states that the trustee must determine the market value of the assets held by the fund on 30 June each year, for financial statement purposes.
The ATO defines market value as: “an amount that would be agreed to by a willing buyer and seller within an arm’s length transaction, with the value evidenced, using objective and supportable data”.
The Auditor’s Role
The SMSF auditor’s role is to consider the evidence provided by the trustee and whether this is sufficient and appropriate to support the recorded market value.
Within this role we are often asked by trustees if a residential property market value:
► Needs to be evidenced annually; and
► Whether a market data report can be relied on to support the market value or is a formal appraisal required.
As auditors, we consider the type of objective and supportable data that is available to provide reasonable assurance that the investment market value is materially supported on 30 June.
We also consider available evidence up to the date of the issue of the audit report.
The Trustee’s Role
A trustee is required to:
► Support the market value of the property on 30 June each year by gathering market value evidence within 6 months of this date;
► Consider the available evidence;
► Determine what information is the most relevant to support a market value; and
► Provide adequate documentation to the auditor.
Market data reports
Source: Available from online providers or paid providers such as CoreLogic and Pricefinder.
Market data reports are readily available and may provide a reliable source of information of market value for residential properties. This reliability tends to be obtained where:
► Location is a populous residential area; and
► The fund property and comparable properties have greater generic vs unique characteristics.
In reviewing market data reports, a Trustee should consider and confirm the following to support the reliability of a market data report:
► Fund property characteristics are populated in the report;
► The price range stated has a high confidence level; and
► Sold property comparisons within the report are similar to the fund property, and within 6 months of 30 June.
Market Data Reports that do not provide sufficient evidence without additional consideration include:
► A price range of a low or medium confidence level;
► Comparison properties for sale as this provides evidence of the price for a willing seller only. The ATO guidance considers a willing seller and buyer interaction;
► Comparison properties that are not comparable to the fund property;
► No listed comparison properties sold within 6 months of 30 June; or
► Market data report not dated within 6 months of 30 June.
Gathering additional information to support the property market value
General market data movement consideration
Prior to considering additional information we suggest that the trustee considers whether the market data for the suburb or city indicates that a material movement has occurred in market values for the residential property from the;
►Date of the current market report to 30 June or
►Date of the prior year market data report to 30 June.
Where a material movement has not occurred, the prior year market data report may provide sufficient evidence to support the market value at 30 June in conjunction with the general market value movement data.
Alternatively, the trustee should consider the nature of the property, and the specific evidence to support the gaps as listed above. This would include consideration of the detailed information within the market data report that may be used to support the market value.
Price range of a low or medium confidence level
► Are there certain comparison properties within the report that best reflect the property?
► Can these properties be selected to support a trustee valuation for the fund property at a high confidence level?
► Can the trustee prepare a minute or document this consideration to support their evidence gathering?
Comparison properties sold are not comparable to the fund property or not sold within 6 months of 30 June
►Trustees may either seek comparable property sales from another market data source or obtain a market appraisal or valuation to support the sale from a desktop valuer or local agent.
There is No Rule of Reliability
Although in most instances, we find market data reports can be relied on to support a market value for SMSF residential investment, there is no blanket rule. The trustees need to consider the market data report to determine whether it materially supports the market value. There are certain considerations of a market data report that need to be made to confirm it is reliable.
The underlying data at times may be useful even if the parameters of the report do not meet the reliability guidance.
For this reason, when reviewing residential property investment, it is recommended that a trustee considers the market data report and:
► determines that it accurately reflects a market value for the property;
► engages with the fund administrator proactively to support market value documentation; and
► maintains a file of supporting data each year for audit including enquiries made.
If you have questions whilst gathering or assessing the relevant market data reports to support your residential property valuations, please don’t hesitate to reach out. We’re here to help ensure your documentation is compliant and audit ready.
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