With the growth of self-managed superannuation funds and continued trend for real estate investment within super Property Sales and Leasing are increasingly approached by trustees of self-managed super funds in relation to appraisal of real estate investments within the self-managed superannuation fund environment.
The Australian Tax Office indicates a requirement for valuation of real estate assets held in a self-managed super fund to ensure compliance with accounting and reporting obligations, in relation to certain transfers of assets, around pension phase and in a range of specific instances.
Depending upon the situation the Australian Tax Office may generally be most concerned with the valuation process undertaken rather than who completed the valuation and in the case of real estate this may include a registered valuer, a member of a professional valuation body or a person without formal valuation qualifications however who is experienced in the particular field.
The Australian Tax Office generally notes that a valuation undertaken by a real estate agent would be acceptable.
Relevant factors to take into account in the valuation process for real estate may generally include evidence of the value of similar properties (comparable transactions), the original purchase price for the property, improvements undertaken to the property, market yields and independent appraisal.
Critical to the approach is that the method does not conflict with the Australian Tax Office requirements relating to market valuation for tax purposes, there being no evidence of different values for different purposes and that the valuation is based on objective and supportable data.
Trustee’s need to consider whether they are meeting their accounting and reporting obligations in terms of determining a market valuation of real estate investments at the appropriate time and frequency along with the standard and level of detail of such valuations and the appropriateness of the experience and knowledge of the provider of such information or valuation.
Ultimately however independent legal and accounting advice should be sought and relied upon given interpretation, rules and requirements may change from time to time.
For all real estate sales, leasing and property management or business sale requirements across metropolitan Sydney or to discuss an appraisal of your self-managed superannuation fund real estate investment please contact Tod Anderson on 0412 350 285.