Auditing, Compliance, Documentation, Property, SMSF

Act now on property valuation data

Comparable sales data Property valuations Asset valuations SMSF Self-managed superannuation Auditor Tactical Super Deanne Firth

To comply with ATO guidelines and auditor requirements, SMSF practitioners should secure up-to-date sales data for property valuations as soon as possible.

Practitioners seeking comparable sales evidence to support property valuations should obtain it as soon as possible as using recent data increases the likelihood of the fund’s financial statements being approved at audit, according to a senior industry professional.

Tactical Super director Deanne Firth noted ATO guidelines require SMSFs to support valuations with comparable sales data and advised practitioners and trustees to promptly obtain this information while it remains accurate and relevant.

“Practitioners should be running their comparative [sales data] right now because those sales are as close to the end of the financial year as you can get, making them more accurate,” Firth said during an Institute of Financial Professionals Australia webinar recently.

“Comparable sales data is generally easy to get for residential properties. Class provides them inside their software and you’ve also got the and websites to work from. Keep in mind that the data will be from the time that the report is run.

“If you wait until May next year to run those reports, the data from those websites is going to be from then, which is too far outside the range. We generally remind our accountants: run your valuations for all your properties now so that you’ve got them ready sitting on file for when you’re completing the financial statements.”

If practitioners have difficulty finding comparable sales data for commercial properties, she suggested using the subscription-based Price Finder service as it is commonly used by real estate agents for the same purpose.

Tactical Super director Jacob Kewley said he was unlikely to approve older data when auditing a fund, particularly as the ATO is currently reviewing SMSFs that have not updated their asset valuations for several years.

“The hard line for me is within six months either side of the end of the financial year. There is an argument data can be relevant outside of that range, however, I wouldn’t accept it,” Kewley said.

“It’s even better if you can get that data closer to 30 June and farther away from January and December as possible. That comparative data, in combination with an opinion of value, either a kerbside sworn appraisal or a trustee opinion of value, can work together to serve as a compliant valuation.

“Even where a kerbside appraisal doesn’t specifically cite comparatives, the agent will have considered the sales data in arriving at their written conclusion and most agencies will provide that data to trustees upon request.”

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