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How ‘The Block 2020’ refutes a common tax myth
An industry professional has found more than $14 million in total estimated depreciation on The Block 2020, disproving the myth that only new properties can claim depreciation.
How ‘The Block 2020’ refutes a common tax myth
An industry professional has found more than $14 million in total estimated depreciation on The Block 2020, disproving the myth that only new properties can claim depreciation.
Owners of income-producing properties can often claim sizeable tax deductions for the natural wear and tear that occurs to a building and its fixtures and fittings over time.
These deductions are known as property depreciation.
According to Bradley Beer, CEO of BMT Tax Depreciation, it is a widely held belief that only new properties hold depreciable value.
“We know from our own research at BMT that a good proportion of property investors miss out on claiming significant amounts at tax time, simply because they think that older properties don’t hold depreciation deductions,” said Mr Beer.
“This couldn’t be further from the truth. Renovated properties, such as those on The Block, can hold hundreds of thousands, and sometimes millions, of dollars in lucrative tax deductions.”
He pointed to the popular reality TV show where contestants have renovated five properties in the suburb of Brighton Victoria.
“Buyers of The Block properties are not only home owners, but also savvy property investors looking to build on their long-term wealth.
“With a total renovation cost greater than $14 million, this season of The Block will once again be a lucrative opportunity for property investors to take advantage of the 14 million-odd dollars in depreciation deductions,” said Mr Beer.
The average total depreciation is estimated at just under $2.9 million per property.
“Prospective buyers will factor this depreciation into their cash flow analysis, which will ultimately help them weigh up their investment decision.”
360A New Street, renovated by contestants Jimmy and Tam, holds the greatest depreciation tax deductions this season, coming in at an estimated maximum total of $3,225,879.
“The lucky buyers of The Block investment properties can claim this depreciation for the next 40 years, or up until 2060,” concluded Mr Beer.
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