Valuing a trust or company that owns property

How are units or shares valued when the entity owns property?

Start with the property value, add the other assets, take off the debt, and share what is left across the units or shares on issue. The ATO's guide to valuing SMSF assets lists a property valuation as evidence where property is the only asset of the entity.

1. Property: the figure from the property valuation.
2. Add other assets at market value: cash, term deposits, listed investments and money owed to the entity.
3. Take off liabilities: the loan, loans from members or related parties, and accrued costs and tax.
4. Share the result across the units or shares as the deed or constitution provides, then consider the size of the fund's holding and the rights attached to it.

The result is a value for the units or shares, which is not the same as the value of the property. A trust with a large loan has much less value for its unit holders than the property alone suggests.

Who provides the property valuation?

A registered or certified property valuer provides it, not us. The figure must come from a valuation by a registered or certified property valuer, which the trustees already hold or obtain. We read the valuation, check how it fits with the entity's accounts and use the figure as an input. We never sign a property figure.

Property held directly by your fund: we are not taking direct property valuations yet. If a trust or company owns the property, we value the units or shares using a property valuation you already hold.

If the entity has no current property valuation, the trustees need to get one from a registered or certified property valuer before we can value the units or shares.

What do we check in the property valuation?

• Date. It should be at or close to the valuation date for the units or shares.
• Basis. It states market value.
• Description. It covers the whole property the entity owns and matches the title and lease details we have been given.
• Assumptions. Any special assumptions the property valuer made, such as vacant possession or planned works.
• Leases. The tenant, term and rent, including whether the tenant is a related party.

If anything does not fit, we ask before we rely on the figure.

How often should the property valuation be refreshed?

The trustees should check each year whether the property figure still reflects market value, and replace it if it is materially inaccurate or after a significant event. The ATO's guide says a previous independent valuation can be relied on if it is still appropriate, and the trustees should assess and document that.

The guide lists significant events as a disaster, a pandemic, market volatility or a change in the asset's character, and says to get a new valuation or alternative evidence after one. The ATO also identified funds that reported property and unlisted trusts at the same value for three consecutive years. SMSF Adviser reported that the ATO named valuing only every three years as an outdated practice. The ATO's own initial evaluation, in its key messages of 8 July 2025, found around 63% of funds changed property valuations after its market valuation letter campaign. (SMSF Adviser reported 80% in March 2025.) See the ATO letter.

When the property valuation changes, the value of the units or shares changes with it.

What if the property is leased to a related party?

The ATO's guide says a fund's investments must be made and maintained on an arm's length basis, so the lease terms matter to the trustees and their advisers. We record the lease and rent as you give them to us and note what the property valuer assumed about rent.

We do not advise whether a rent is at arm's length or whether an arrangement meets the super laws. If the fund is acquiring units or shares from a related party, the guide says permitted acquisitions must be made at market value. See related-party transfers and arm's length valuations.

What does it cost?

A trust or company that holds property, cash, term deposits or listed investments is an investment entity, valued from its net assets. Investment entity: $995 + GST. Each investment entity is priced separately. Delivery is 2 business days. Delivery time starts once payment and all required information have been received.

If the entity also runs a business, it is valued as a trading business and priced on turnover. See business interests. Annual 30 June update of a valuation we prepared last year, same entity, no restructure or major change: $495 + GST per entity. We confirm the fee in writing before we start. No hourly billing.