Every year, your fund has to report the market value of its assets at 30 June. For a fund holding cash and listed shares, that is trivial. For a fund holding property, it is the single most common place where things go wrong.
The requirement itself is not new. It is in the Superannuation Industry (Supervision) legislation and the ATO's valuation guidelines. What has changed is the evidence standard.
The old approach no longer works
For years, the standard practice was a short letter from a local agent with a number in it. That is no longer sufficient. The ATO expects valuations to be based on objective and supportable data, and a brief letter stating a value with no comparable sales, no methodology and no reasoning does not meet that standard.
This is not the ATO being difficult. Think about what the number does. It determines your total superannuation balance, which determines your contribution eligibility, your bring forward capacity, whether you can use carry forward concessional contributions, and now whether Division 296 applies to you. It determines the exempt current pension income proportion. It determines whether the fund breaches the 5 per cent in-house asset limit. A number someone guessed at flows through all of that.
What good evidence looks like
You do not need a formal valuation from a qualified valuer every year for every property. The ATO's guidance is that trustees are not required to obtain an independent valuer's valuation for the purposes of preparing the accounts. But you should consider one where the asset is a significant proportion of the fund's value, or where the valuation is complex or difficult. For most SMSFs holding a single property, that property is a significant proportion of the fund.
What your auditor is looking for is evidence that supports the number. In practice that means:
Comparable sales of genuinely similar properties in the same area, recent, with addresses and dates.
Some reasoning about how those comparables were adjusted to reach the figure for your property.
Something written down and dated, kept with the fund's records.
A rates notice on its own is not a market valuation. A number carried forward from last year with no consideration is not a valuation at all, and it is one of the easiest things for an auditor to spot.
When you need to look again outside the annual cycle
Certain events trigger a valuation regardless of where you are in the year.
Starting a pension, because the amount counted against your transfer balance cap is set at that point. Commuting a pension back to accumulation. A death benefit calculation. Acquiring or disposing of the property. Any transaction with a related party. A significant change to the property itself, such as major renovation, or a significant movement in the market.
What happens if the evidence is not there
Your auditor has to verify that assets are reported at market value. If the evidence does not support the number, the auditor may qualify their opinion and may lodge an auditor contravention report with the ATO. That report puts your fund in front of the regulator, and market valuations are on the ATO's compliance focus list for auditors in 2026-27, which means auditors are being reviewed on exactly how hard they pushed on this.
The practical advice is simple. Get the valuation evidence during the year, not in a scramble in April. It is cheaper, it is better, and it is the difference between a clean audit and a conversation with the ATO.