Property valuations for your SMSF: Why they’re required and what’s changed

If your SMSF holds property, it’s important to remember that regular property valuations are not optional. They are a legislative requirement and an ongoing cost of owning property within an SMSF.

A new law, known as Division 296 (the “$3 million super tax”), has been passed. This will introduce additional tax on total superannuation balances exceeding $3 million.

The value of assets as at 30 June 2026 may be used as a cost base reset for future calculations under this new tax. Importantly, this opportunity is available even to members who are currently below the $3 million threshold.

From a practical perspective, this means that accurate market valuations at 30 June 2026 will be important. The value reported at 30 June 2026 will directly impact a member’s total super balance and potential Division 296 exposure. For property holding SMSFs, obtaining a robust and supportable property valuation at 30 June 2026 should be viewed as essential, not optional.

Residential Property

Residential property held by an SMSF must be reported at market value in the fund’s financial statements each year. Trustees are required to ensure that the valuation is objective, supportable and based on market evidence.

While a formal valuation may not be required every year, a qualified independent valuation is generally necessary when:

• The market has materially changed
• The property has been improved or renovated
• The SMSF is commencing or paying pensions
• The property is being transferred into or out of the fund
• The auditor requests stronger evidence of value

Obtaining a professional valuation is part of demonstrating compliance and ensuring accurate member balances.

Commercial Property

Commercial property valuations are subject to heightened scrutiny, particularly where the property is leased to a related party.

In most cases, commercial properties require:

• Regular independent valuations, often annually
• Clear evidence that rent is set and reviewed at market rates
• Strong documentation to support the property’s market value for audit purposes

Auditors frequently expect formal valuations for commercial properties, making this an unavoidable and recurring cost for SMSFs holding business real property.

Key Takeaway for Trustees

Property valuations are not a discretionary expense but are a necessary cost of holding property in an SMSF. Failing to obtain appropriate valuations can lead to audit issues, compliance breaches, and delays in finalising accounts.

If your SMSF holds property, either directly or indirectly, and you’re unsure whether your current valuation is sufficient, or if a new valuation is required, please contact us. We are happy to guide you through what’s needed to remain compliant and avoid unnecessary issues at audit time.

Published 22/06/26