Depreciation incentives lure savvy property investors to The Block 2018 auctions

BMT team — Mon, 29 Oct 2018 22:45:58 +0000

The five apartments featured on The Block 2018 (season fourteen) have exceeded sales expectations and set a new record price for the suburb of St Kilda. The sale of the luxury apartments is expected to breathe new life into the St Kilda property market. Each of the luxury apartments sold for well over their estimated reserve price, assisted greatly by the scarcity factor of the building’s heritage, it’s art deco charm and the generous proportions of each apartment. Locals described the Channel 9 The Block 2018 renovation of the former Gatwick Hotel to be the catalyst for real improvement in Fitzroy Street and its surrounding areas. The show’s attention brought excitement to a totally new and untested part of the Melbourne market, with property experts calling it “the Gatwick effect” — a renaissance of the once-thriving dining strip and its surrounds. During the show’s finale auction episode, which aired on Sunday the 28th of October 2018, the five apartments at 34 Fitzroy Road fetched between $2.77 million and $3.02 million. This was well above the median house price in St Kilda, which sits at only $1.05 million. This year’s The Block 2018 winners were controversial Sydney couple Hayden and Sara, whose win left everyone a tad gobsmacked. Not only did they smash their reserve price, but they came out ahead of the Gatwick’s two most popular apartments. Their lower floor apartment sold for $3.02 million and the couple banked the overall prize money of $100,000, adding to their $545,000 prize money for the amount the property achieved above the reserve. In second place, after heading into auction night with a clear, competitive advantage, were South Australian couple Kerrie and Spence. Their prize money totalled $415,000. The couple were previously predicted to be the season’s winners, thanks to the lucrative depreciation estimates found in their apartment by BMT Tax Depreciation as shown the previous episode below. According to estimates provided to each of the couples by BMT, Kerrie and Spence’s property had the highest amount of depreciation deductions available, with an estimation of $135,132 in tax depreciation deductions in the first full financial year alone. In total, Kerrie and Spence’s apartment was found to hold over $3 million in depreciation deductions. These depreciation deductions were a lure for potential investors according to Kerrie and Spence’s Real Estate Agent, Hockingstuart’s Emily Adams. “We had a lot of property investors look at the apartments this year prior to auction. They loved the potential tax depreciation that these apartments came with,” said Ms Adams. The attractive depreciation schedules are the result of substantial improvements made to the building. Along with expensive appliances and luxury fittings, the apartments also come with a full suite of designer furnishings and homewares. In Kerrie and Spence’s apartment, the property had a number of standout items such as a sophisticated entertainer’s kitchen with designer Caesarstone kitchen benches, Bosch appliances, an outdoor spa, triple garage and a glorious master retreat which helped to make this property a tremendous buy for property investors. These types of assets, combined with the substantial structural improvements made, combine to result in the significant depreciation deductions that investors could claim as a tax deduction and therefore assist them in reducing the cost of holding the property once it becomes income producing. Interestingly, it was reported that one buyer who splurged almost $6 million for two of The Block penthouses had inspected the former Gatwick Hotel only two nights before the auction. The tech entrepreneur and property investor said he had snapped up two bargains. He bought Norm and Jess’s apartment for $2,859,000 before strolling next door and buying Bianca and Carla’s apartment for $2,991,000. Property investors that are interested in better understanding the tax deductions that may be available to them for any property can utilise BMT’s free online tax depreciation calculator or call 1300 728 726 to speak to an expert at BMT Tax Depreciation on or visit the BMT website for more information. All images from 9Now The Block.

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The Block 2018 contestants tackle depreciation

BMT team — Wed, 17 Oct 2018 22:17:53 +0000

While it may not have been the reason behind their design and styling choices, The Block 2018 contestants recently discovered that their apartments hold millions of dollars of hidden value for savvy investors in the form of depreciation. BMT Tax Depreciation Chief Executive Officer, Bradley Beer, appeared on the show for a surprise depreciation challenge, which saw the contestants guessing the depreciation value of their apartments. The contestants were suitably baffled. “No one knows anything about depreciation tax, no one, unless you’re in the industry, or you’re a multi-million dollar investor or you’ve got an uncle who knows what they’re talking about,” said Jess when she and Norm were asked to determine what could be claimed from their apartment. The couples tried hard to calculate the construction costs but eventually gave up and guessed, or in Norm and Jess’ case, went to the pub for a drink – a reminder that all that hard work is better left to the experts. The results were astonishing, and all contestants severely undervalued their apartments. Kerrie and Spence’s apartment attracted the highest depreciation deductions, with over $3 million over the life of the property. This depreciation makes their apartment much more attractive to investors and could be just the encouragement a potential buyer may need to offer the winning bid come auction day. Before the luxury apartments go to auction, let’s take a look around some of the season’s winning rooms to see which assets attract depreciation deductions. Kerrie and Spence: kitchen Courtney and Hans: living and dining area Kerrie and Spence: master ensuite Kerrie and Spence: kitchen Kerrie and Spence’s winning kitchen astounded the judges with its functionality and inclusion of top-range appliances. The kitchen features an impressive wine fridge and a ridiculously spacious butler’s pantry. The kitchen received a perfect score from the judges, with Neale commenting, “for anyone who loves cooking, who loves entertaining, this is paradise.” Investors could claim capital works deductions on the kitchen’s cabinetry, tapware, sinks and benchtop. The rangehood, oven, stools and light fittings would all attract plant and equipment deductions, providing investors with additional cash flow. Courtney and Hans: living and dining area With the biggest living and dining area in the history of The Block, this space was destined to make a statement. And make a statement it did, wowing judges with emerald, velvet chairs and a surprise bar which emerged on cue with a command from Alexa. The area was described as ‘grandeur’ and ‘sophisticated’ and the judges especially loved the sitting area with two opposing lounges. “It’s not about having distractions. It’s not about having a television. It’s about actually interacting with each other, I love that,” Darren said. The space would also impress investors, who could claim plant and equipment deductions for the furnishings including the sofas, television, rug and coffee tables. The flooring, air conditioning and fixed bar cupboards would also entitle investors to lucrative capital works deductions. Kerrie and Spence: master ensuite Kerrie and Spence’s monochromatic winning ensuite dazzled with simplicity and space, with the judges commenting on the balanced styling and attention to detail. Unlike Hayden and Sara’s extravagant $75,000 ensuite, complete with a golden bath tub, Kerrie and Spence embraced a minimalist theme. The ‘regal’ bathroom cabinets were a big hit with the judges. “I love that curved edge, it just gives it that little touch of retro,” said Neale. The couple chose a grey, herringbone tile for their feature wall. The tiles and fixed items within the ensuite can be claimed as capital works deductions. This includes the tapware, sinks, cabinets and marble bench. Investors can claim the ensuite’s accessories as plant and equipment deductions. For everyday Australian’s who are considering buying an investment property, whether it be a Block apartment or a regular house or unit, discover what deductions you can claim and request a quote for a tax depreciation schedule today. All images from 9 now The Block.

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Depreciation incentives lure savvy property investors to The Block 2018 auctions

The Block 2018 contestants tackle depreciation