Why SMSF Auditors Require Annual Title Searches

Are auditors over-auditing by requesting a title search every year?

Not at all. Understanding SMSF title search requirements is essential for ensuring compliance and protecting fund integrity. Title searches are not an optional extra, they are a mandatory part of the SMSF audit process. As outlined in ATO guidance QC 45566, auditors must verify asset ownership and check that fund assets are held appropriately.

Under Section 65, Regulation 4.09A, and Regulation 13.14, auditors must:

Review asset ownership to ensure it belongs to the SMSF and not used to secure personal borrowings.
Confirm that SMSF assets are kept separate from personal assets held by trustees or standard employer-sponsors.
Seek written confirmation from trustees and conduct the following:
- A property title search to check for encumbrances
- A Personal Property Securities Register (PPSR) search for any registered interests against fund assets

These steps ensure compliance and reduce risk.

What Is a Title Search?

A title search is a legal document that confirms current ownership of a property. In some cases, it may include a historical title search, which outlines the property’s full legal history. Importantly, the title search provides clear and reliable evidence of who owns the property.

This document plays a key role in fulfilling SMSF title search requirements, especially when auditors need to confirm asset ownership.

Why Are Title Searches Important in SMSF Audits?

Title searches serve two key purposes in an SMSF audit:

Confirm the fund legally owns the property.
Ensure there are no hidden charges, liens, or mortgages that could breach compliance.

These checks help auditors ensure that the SMSF complies with Reg 13.14, which prohibits charges over fund assets, and with Section 62, which requires the fund to operate solely for retirement benefits.

Because these obligations are serious, meeting SMSF title search requirements is not optional, it’s essential. Without proper documentation, an audit cannot confidently verify ownership or rule out compliance risks.

Meeting the Minimum SMSF Title Search Requirements

At National Audits Group, our auditors always request or conduct a title search after 30 June of the audit year. This step ensures that we verify asset ownership accurately and identify any encumbrances.

To meet SMSF title search requirements, we check the following:

Individual trustees: All individuals must be listed as property owners.
Corporate trustees: The company name must appear as the registered owner.
Less than 100% ownership: The title must show the property is held as tenants in common, not joint tenants.
Mortgaged property: The bare or custodian trustee should be listed as the owner, with mortgage details clearly recorded.
Encumbrances: If encumbrances appear, we investigate and raise them with trustees for resolution.

Each of these checks is designed to protect the SMSF’s compliance and ensure proper asset documentation.

Why Annual Title Searches Add Value

Some may see annual title searches as repetitive, but they are far from unnecessary. These checks serve as early warning signs of potential compliance issues. In fact, they protect trustees and members by confirming that no unauthorised changes have occurred since the previous audit.

At National Audits Group, we approach SMSF audits with precision and independence. We perform every required check, including title searches, because we know what’s at stake, your compliance, your licence, and your fund’s integrity.

By understanding and following SMSF title search requirements, trustees and accountants can feel confident their fund is meeting ATO and ASIC expectations.