SMSF Property Valuation Requirements: The ATO Rules Explained (2026)

Every property held in a self-managed super fund must be reported at market value as at 30 June each year. That obligation comes from regulation 8.02B of the SIS Regulations, supported by section 35B of the SIS Act, and it applies to every SMSF financial year, not every third year. What the ATO expects is that the value in your fund's accounts is backed by objective and supportable data your auditor can verify.

Is the Old 'Every Three Years' Rule Still Valid?

No. The three-yearly full valuation was a convention, never the law. The requirement to report assets at market value applies annually, and the ATO's current guidance makes clear it expects the evidence supporting that value to be refreshed each year. What can change year to year is the form of evidence: a fresh valuation report one year and well-documented supporting evidence the next may satisfy some auditors, but many now ask for updated evidence every 30 June, and a growing number of administrators require it.

What Evidence Does the ATO Accept?

• A full valuation carried out with a physical inspection
• A desktop valuation report based on objective and supportable data
• An appraisal from a licensed real estate agent, with at least three comparable sales
• A trustee's own valuation, with at least three comparable sales and documented reasoning

These routes come from the ATO's Guide to valuing SMSF assets. The common thread is objective and supportable data: recent sales of genuinely comparable properties, adjusted for differences in location, land size, condition and use, with the reasoning written down. A figure without evidence, however plausible, does not meet the standard.

When Should You Use a Qualified Independent Valuer?

The ATO recommends a qualified independent valuer where the asset is complex, where the property represents a significant proportion of the fund's assets, or where a related-party dealing is involved, such as acquiring business real property from a member or leasing commercial premises to a related business. In those situations the auditor will look hardest at independence and methodology, and a professionally prepared report is the cleanest way through.

What Happens if Your Evidence Is Inadequate?

Your fund's auditor is required to verify market value evidence under regulation 8.02B; the ATO's guidance for auditors, Verifying the market value of fund assets, sets out what they must check. If the evidence does not stack up, the auditor can qualify the audit report and may be obliged to lodge an Auditor Contravention Report with the ATO. That can draw review activity, and administrative penalties can apply to trustees who fail to meet the valuation requirement.

What Events Force a New Valuation?

A valuation should be refreshed outside the annual cycle when something material changes the property's value: renovations or improvements, demolition, rezoning, a natural disaster, or a significant market movement. If you believe the market value has changed, you must obtain evidence that supports the new figure rather than rolling the old one forward.