The countdown to auction day for this season of The Block: Blocktagon is here, with the hammer set to fall as bidders vie to secure their favourite property when the auctions occur tomorrow.
For the contestants, the auctions will no doubt bring many emotions as they cast their eyes back on all their hard work over the weeks turning what was a thirty four room hotel into five luxury apartments located in South Yarra.
Before the Block Heads could get too excited about the prospect of buyers snapping up their handy work, our very own Chief Executive Officer Bradley Beer took a trip to give the contestants some tips on the depreciation deductions buyers could claim if they purchase the property as an investment.
A potential buyer who purchases any of the five Blocktagon apartments for investment purposes will find themselves receiving significant returns once the property is tenanted.
On completing a tax depreciation estimate for each of the apartments, BMT Tax Depreciation found that investors could claim an average of over $1.5 million in depreciation deductions over the lifetime of the properties.
The following table provides a summary of the tax depreciation estimates found by BMT.
According to these estimates, Dean and Shay’s penthouse apartment will provide investors with the highest depreciation deductions.
A buyer of their apartment will receive between $62,735 and $73,190 in deductions in the first financial year alone. Over the lifetime of the property, a total maximum claim of $1,891,969 can be deducted by the penthouses new owner.
BMT’s estimates suggest Luke and Ebony’s apartments will reap the next highest deductions for investors, with the total maximum claim of $1,867,009 able to be claimed over the lifetime of the property.
Kingi and Caro’s apartment has the lowest estimated deduction of the apartments, still netting a significant $1,792,190 in deductions for an investor buyer over the lifetime of the property.
It will be interesting to watch and see whether these deductions impact the number of buyers attracted to each apartment on auction day.
If BMT’s estimates are anything to go by, Dean and Shay could possibly be the lucky couple to take home first place this series. However, according to our own Bradley Beer, it is a close field and any of the five apartments could net substantial winnings if they sell above their reserve as predicted.
So, like those Blocktagon fans of you at home, we’ll be eagerly watching when the hammer falls and the final episode airs. One thing’s for sure, an investor who purchases the apartments and claims depreciation will be a winner.