THE EXPATRIATE Tax Depreciation Specialist Bradley Beer from BMT Tax Depreciation and Quantity Surveyors shares his insights into why The Block Properties are so attractive to astute property investors

This year The Block location was in the Gisborne South within the Victorian Macedon Ranges, a 45min drive from Melbourne; it is a great location with sprawling lifestyle blocks, vineyards, olive groves and thriving equestrian and alpaca industries. Therefore The Block set its reserve at a mere 4 million for the Blockheads (contestants).

“From the charming location and impressive renovations to the jaw-dropping depreciation deductions and unexpected auction outcome, this season has been the most extraordinary yet.

Generating a record-winning profit of $1,586,666.666, Omar and Oz have won The Block 2022, selling their property at auction for $5,666,666.66 to serial Block buyer Danny Wallis.

For those who don’t know, Danny Wallis is a serial The Block property buyer. In 2021 he spent 12.2 million; 2020 he snapped up three of the five properties for 11.8 million.

Danny Wallis also purchased the following two properties sold on auction day, including Tom and Sarah-Jane’s House 1, which sold for $4,100,000.99, generating a profit of only $20,000.99, and Rachel and Ryan’s House 2, which sold for $4,249,000.50 post-auction generating a profit of $169,000.50.” Bradley said.

Bringing Danny’s total spend in 2022 to a whopping $14,015,668.20

So why would Danny Willis purchase three properties?

“BMT Tax Depreciation was asked to estimate the depreciation deductions available on this season’s properties on The Block. Below we outline the deductions found and just how advantageous they could be for an investor buyer.

Jaw-dropping numbers

Because of the substantial renovations completed and brand-new assets installed, the houses are brimming with depreciation deductions.

The table below demonstrates the depreciation deductions BMT found on The Block 2022.”

“Ankur and Sharon’s house (House 3) generated the highest deductions with a total of $5,840,166, more than $100,000 higher than house two in second place. The other houses don’t fall far behind with an average total of $5,292,597 in depreciation deductions and an average of $203,340 in the first full financial year.”

There are still two properties that have now sold and are currently still on the market and is a great opportunity for a;

“ savvy investors will take these lucrative deductions into account when considering any Block purchases as these deductions have the potential to improve an investor’s cash flow significantly.”

The Block properties have the potential to claim over thirty million dollars in depreciation deductions, no wonder they are a property investor’s goldmine.

Why are they so attractive to a property investor?

1. They are filled with brand-new assets

2. They have strong tenant appeal,

3. Newly renovated, therefore low to no maintenance

4. Fewer annual expenses - due to point no 3.

5. Offer significant tax depreciation benefits.

Omar and Oz’s kitchen features $250,000 in top-end appliances. Even if the furniture and other assets are removed for future tenants, the fixtures and fittings alone, such as light fittings, kitchen and laundry appliances, blinds and curtains and more, hold profitable deductions.

Claiming depreciation is an essential step to optimising cash flow and building and maintaining a successful property portfolio. This applies to all types of property investors.

To read the full report by Bradley Beer, click on the link below

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