New SMSF Audit requirements from

1 july 2025

The following requirements will apply to all audits from 1 July 2025 and must be met to ensure compliance and avoid delays in audit finalisation.  Please review these carefully and ensure the appropriate documentation is obtained. 

 

1. Property Valuations.

A current and supportable market valuation is required for all property holdings each financial year. 

The valuation must include: 

• Objective data and comparable sales. 
• A clearly documented methodology. 

If reusing a prior valuation: 

• Ensure it remains relevant and is supported by updated market evidence that details why the valuation still reflects the current market value.

 

2. Lease Agreements

A formal lease agreement must be provided for every SMSF property: 

• Applies to both private leases and leases via third-party agents. 
• Prior to this date, lease agreements would not be queried where the property was managed by a third-party agent. 

However, based upon recent ATO correspondence, this now is required to be queried for all property, regardless of who it is leased to or how it is managed. 

• Where a lease agreement cannot be provided, Part A of the audit report will be qualified. 

• If the following minute is completed and signed by the trustees, the Part A will be avoided.  

Where a property is leased to a related party: 

• A current rental appraisal must be provided to confirm the lease is at market rates. 
• The appraisal should be dated around the commencement date of the lease. 

If a market appraisal was not obtained when the lease commenced: 

• It must be obtained prior to submitting the fund for audit. 

If the rental appraisal differs from the amount stated in the lease agreement: 

• Trustees are encouraged to update the lease agreement to reflect the appraised market rent. 

If the lease is not updated and the rent charged is below market value: 

• An Auditor Contravention Report (ACR) may need to be lodged due to a breach of section 109 of the SIS Act. 

If the rent charged is above the market appraisal: 

• The fund may be in breach of Non-Arm’s Length Income (NALI) rules and this must be appropriately addressed. 

 

Article posted  21/08/2025