While Kirsty and Jesse took out The Block’s backyard week, the staggering depreciation figures show that the ultimate winners will be any investor that becomes the owner of every one of these yards.
BMT Tax Depreciation has been preparing depreciation reports for The Block properties since 2016. Depreciation is the natural wear and tear of property and assets over time. Owners of income-producing property, including investors, can claim this depreciation as a tax deduction for up to forty years.
These deductions can reach the hundreds of thousands, or even millions, of dollars, and The Block properties prove this. The maximum total depreciation deductions for the properties range between $3 and $3.6 million. This includes the indoor and outdoor areas, along with all the assets such as furnishings and appliances.
Meanwhile, we have estimated that the total maximum deduction from The Block backyards range between $167,000 and $256,000 alone.
Not only did Kirsty and Jesse take the week’s win, but their backyard also generates the most deductions. It’s estimated that this space will produce a total maximum depreciation deduction of around $259,000.
The drama surrounding the battle of the pools also proved beneficial for any future investor-owner. Our depreciation estimates revealed that the pools alone generate total depreciation deductions between $30,000 and $53,000.
In fact, all of the backyards produce robust depreciation deductions over their lifetimes. The table below breaks down the minimum and maximum total depreciation deductions.
Claiming depreciation on landscaped areas
These figures may come as a surprise to some as many investors automatically rule out claiming depreciation on the outdoor areas of rental properties. This is due to the fact that natural landscaping, like plants and real turf, are ineligible for depreciation deductions.
Despite this, backyards can still produce massive tax deductions based on the assets and works completed. The Block 2021 proves this, with depreciation deductions available on not only the pools, but fences, furniture, BBQS, outdoor lighting and much, much more.
This is just one reason why talking to a specialist about tax depreciation is an essential piece to claiming maximum depreciation deductions compliantly. An expert will know what to look for when assessing a property and determine what indoor and outdoor assets or works will be eligible for these lucrative deductions.
When an investor orders a tax depreciation schedule from BMT, one of their specialist site inspectors will physically attend the property to conduct a site inspection. The information they gather will be used by the team as they prepare a comprehensive schedule that will last the depreciable lifetime of the property (up to forty years).
Now that you understand just how much depreciation is out there to claim, contact BMT on 1300 728 726 or Request a Quote to learn more.