Common Mistakes to Avoid When Valuing Your SMSF Property
Common Mistakes to Avoid When Valuing Your SMSF Property: Self-managed super funds (SMSFs) are a serious business, but that doesn’t mean we can’t have a little fun with them! If you’re an SMSF trustee, you know how important it is to get the value of your properties right. After all, the Australian Taxation Office (ATO) requires that SMSF trustees ensure that their assets are valued at their market value. But let’s be real, valuing property can be a confusing and stressful process. To make things a little easier (and maybe even a little funnier), here are some common mistakes to avoid when valuing your SMSF property:
- Believing that your neighbour’s property is worth the same as yours: Just because your neighbour’s house has a pool, a sauna, and a home theater, doesn’t mean your house is worth the same amount. Don’t base your property’s value on your neighbour’s property. Get a professional SMSF property valuation instead.
- Thinking that your property is worth more because it has a “good vibe”: Sorry to burst your bubble, but property values aren’t based on good vibes (although they might be based on location, which can have good vibes). Don’t try to convince your valuer that your property is worth more just because you have a great energy. Get a professional valuation to determine the true value of your property.
- Ignoring the current market conditions: The value of a property can be significantly impacted by the current market conditions, such as supply and demand, economic conditions, and interest rates. Don’t assume that your property is worth the same as it was five years ago. Take the current market into consideration when valuing your SMSF property.
- Not reviewing the valuation report: Once the valuation has been completed, the valuer will provide a written report detailing their assessment of the property’s value. Don’t just file the report away and forget about it. Make sure to review the report and seek clarification on any issues or concerns you may have.
- Believing that all valuers are created equal: Not all valuers are created equal. Make sure to choose a valuer who is qualified and experienced. Don’t just go with the cheapest option, as you might end up with an inaccurate valuation. Look for valuers who are accredited by professional bodies such as the Australian Property Institute (API) or the Royal Institution of Chartered Surveyors (RICS).
- Thinking that you can value your own property: It might seem like a good idea to save some money and value your own property, but trust us, it’s not. Leave it to the professionals. You don’t want to risk getting it wrong and facing penalties from the ATO.
In summary, valuing your SMSF property is a serious business, but that doesn’t mean you can’t have a little fun with it. Just make sure to avoid these common mistakes and you’ll be well on your way to getting an accurate valuation.