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The most recent Phillip Island resort project featured on The Block is catching the eyes of investors based on tax deductions that will surpass asking prices, according to BMT Tax Depreciation.
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The Block’s 2024 properties a ‘tax dream’, says deduction specialist
08 October 2024
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BMT Tax Deprecation, which partnered with The Block for almost 20 years, has revealed the 20th season transformation of a neglected Cowes resort in Phillip Island has created unparalleled investment opportunities.
The company announced the estimated total depreciation deductions claimable for the properties range from $4.4 million to $5.2 million per house.
These figures dwarf the price guides provided by agents, BMT said, which start under $2 million each, adding that these deductions could be a decisive factor and attractive option at auction for “savvy” investors.
BMT Tax Depreciation CEO Bradley Beer said this is an investment opportunity that shouldn’t be passed on.
“Tax depreciation can significantly enhance the investment value of a property,” Beer said.
“For The Block properties, these potential tax deductions will outweigh the purchase price, offering an exceptional investment opportunity.”
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According to BMT, the ATO allows owners of income-producing properties to claim deductions for the wear and tear of their properties over time.
BMT said they have “meticulously” assessed The Block renovated properties and found these ATO deductions apply to them.
From the contestants and renovated properties, Kristian and Mimi’s property was evaluated to hold the highest value in total estimated deductions, sitting between $4,878,000 and $5,391,000.
This is followed by Kylie and Brad’s house which sits between $4,834,000 and $5,342,000, and Ricky and Haydn’s house at $4,842,000.
The assessment also highlighted the properties that would provide the lowest estimated tax deductions.
This included Maddy and Charlotte between $4,240,000 and $4,685,000, and Courtney and Grant at $4,260,000 and $4,708,000.
BMT said in the assessment Kylie and Brad’s property also showed the largest average first-year claim of $176,000 compared to an average of $166,000 across all properties.
“It is important to note that these depreciation deductions are not an indication of the house values but are based on the construction costs,” BMT said.
“In the case of this gated community, the construction costs will also include a proportion of renovations and upgrades of the shared facilities like the communal pool and tennis courts attributed to each house.”
Beer said new owners of the properties will also be able to depreciate their part of the communal areas.
“Cashflow is always a key consideration for investors and tax depreciation plays a significant role,” he said.
“Understanding these values can help buyers make informed decisions that will maximise their returns.”
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