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Why tax deductions could be coming your way

Why tax deductions could be coming your way

by Grace Ormsby | October 03, 2019 | 1 minute read

There’s more than $3.60 million in tax deductions to be claimed by potential property investors who successfully bid on each of The Block’s 2019 competing townhouses, the depreciation assessor has reported.

Bradley Beer
October 03, 2019

According to BMT Tax Depreciation, who has been working with The Block to provide such depreciation assessments, the attribute could increase the price that property investors are willing to pay for the property and give contestants an edge on auction day.

The Australian Taxation Office allows owners of income-producing properties to claim deductions for the wear and tear that occurs as buildings get older and items within them wear out.

BMT Tax Depreciation has noted that all properties are unique, therefore holding different depreciation benefits.

While Jesse and Mel do have an edge over their fellow competitors when it comes to tax deductions with a whopping $3,679,300 in total depreciation, BMT CEO Bradley Beer said the field is close this year.

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“Smart property investors will often make note of the depreciation potential of properties and use that data to help inform the offers they make,” he explained.

“While Jesse and Mel’s property holds the most total deductions, Mitch and Mark ($3.65 million) and Andy and Deb ($3.63 million) are hot on their heels.”

BMT’s assessment showed that Tess and Luke had the property with the lowest amount of tax deductions ($3.61 million) followed by El’ise and Matt ($3.62 million).

Jesse and Mel’s property is also ahead of the competition when looking at tax deductions more short-term.

Their townhouse has $138,055 in deductions claimable in the first year of ownership if the purpose is for an investment, with BMT noting that this would also be of interest to any investors looking to maximise the potential for returns.

The average Block property reportedly contains $131,721 in first year deductions.

“With many challenging real estate markets in Australia at present, cash flow will be a key objective for investors and this is where tax depreciation plays a large role,” Mr Beer offered.

He said regardless of whether buyers are looking to bid on the show or are looking at real estate markets across Australia, they “can make more informed decisions by understanding the depreciation values of properties and how those values will impact their cash flow”.

About the author

Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of editorial at Momentum Media.

Emma has worked for Momentum Media since 2015, and has since been responsible for breaking some of the biggest stories in corporate Australia, including across the legal, mortgages, real estate and wealth industries. In addition, Emma has launched several additional sub-brands and events, driven by a passion to deliver quality and timely content to audiences through multiple platforms.

Email Emma on: [email protected]com.au

Why tax deductions could be coming your way
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