Every SMSF asset needs a fresh 30 June market value, not last year's number carried across

Valuation breaches under regulation 8.02B have climbed above 12% of every contravention SMSF auditors report to the ATO. It is now one of the most common reasons a fund's audit does not go cleanly, and the underlying rule is a single line: every asset of the fund is reported at its market value as at 30 June each year.

The rule is short. The evidence behind it is where funds come unstuck, because "market value" is a claim, and an auditor's job is to test the claim.

The rule, and where it comes from

Regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994 requires the fund's accounts and statements to be prepared using the market value of its assets. Not cost, not last year's figure, not a round number the trustee is comfortable with. Market value, refreshed each 30 June.

"Market value" is not left to interpretation either. Section 10 of the SIS Act 1993 defines it as the amount a willing buyer and a willing seller would agree on, dealing at arm's length, each acting knowledgeably and without compulsion. That definition is the yardstick every valuation in the fund has to meet.

For listed shares this is trivial: the closing price on 30 June is the market value, and the auditor can verify it in seconds. The friction lives in everything else the fund holds.

Real property: no annual valuer, but no free pass either

The most persistent misconception is at the two extremes. Some trustees believe they need a fresh independent valuation of the fund's property every single year. Others carry last year's number across unchanged because "nothing happened." Both are wrong.

The ATO's valuation guidelines are explicit that a formal valuation by a qualified valuer is not required every year for real property. What is required is that the value be based on objective and supportable data. In practice that means evidence: recent comparable sales in the same area, a real estate agent's appraisal in writing, the net rental yield, or an independent valuation where the fund's circumstances warrant one. A council rates notice on its own is generally treated as supporting data, not a standalone valuation.

The line the guidelines draw is between a figure you can point to a reason for and a figure you cannot. Carrying an unchanged number across a year in which comparable properties in the street moved is the second kind, and it is the kind that draws a query. A common practitioner convention is a full independent valuation every three years or so, with evidenced trustee valuations in the intervening years, and a fresh valuation sooner where the property is the fund's main asset, is in pension phase, or has plainly changed in value. That convention is not itself a rule; the rule is the evidence standard.

Collectables, unlisted holdings, and crypto

The awkward assets each carry their own wrinkle. Unlisted shares and units in private trusts have no market screen, so their value rests on the underlying entity's financials, net asset backing, or recent arm's length transactions in the same units.

Collectables and personal-use assets, covered by regulation 13.18AA, must be valued at market value like everything else each year. The heavier requirement bites on disposal: when such an asset is transferred to a related party, a qualified independent valuation is required. Crypto holdings are valued at 30 June using a fair and reasonable rate from a reputable exchange, and because the price at a specific timestamp is public, an auditor can and will check it.

Why a soft valuation costs more than a qualified audit

If the auditor cannot obtain sufficient evidence for a value, two things follow. The audit report can be qualified, and where regulation 8.02B is breached and the reporting thresholds are met, the auditor lodges an Auditor Contravention Report with the ATO. Neither is fatal on its own, but both put the fund on a list it would rather stay off.

The larger cost is quieter, and it is the reason this matters more from FY 2026-27 onward than it used to. The 30 June market value of the fund's assets is not just an audit figure. It rolls straight into each member's total super balance, which governs bring-forward eligibility and the non-concessional cap. It feeds the transfer balance account for anyone in pension phase. And it is now an input to the Division 296 test on balances above $3 million, which commenced on 1 July. A soft valuation no longer just risks a qualified audit; it moves the numbers that decide caps and a new tax. We covered how those 30 June balances flow through at smsfcore.com/div296, and the parallel problem of evidencing franking claims for the same audit at smsfcore.com/blog/franking-evidence-smsf-audit.

The bottom line

The valuation rule has not changed in years. What changed is how many other numbers now hang off the figure you write down on 30 June. Keep the evidence with the value while you still remember where it came from, not in May when the auditor asks and the comparable sales are eleven months stale.

SMSF Core tracks member balances against the caps and the Division 296 threshold and cites the ATO source behind every figure it carries. It is in closed beta, starting with the franking module — join at app.smsfcore.com, and the Division 296 estimator at smsfcore.com/div296 is free with no signup.

SMSF Core is an information tool, not a licensed financial service. Talk to a licensed adviser or your accountant about your own position.