Which apartment on Channel 9’s 2016 season of The Block is going to be the most appealing to potential investors? EPM regular, Bradley Beer from BMT Tax Depreciation and his team have run the numbers and share their analysis.
Here are the key points:
- It looks like investors could claim an average of over $2.2 million in depreciation deductions for each apartment.
- Kim and Chris’s penthouse apartment has the highest amount of depreciation deductions available, with a first year deduction estimated to be at $87,470 and a total deduction estimated to be at $2,448,042 which can be claimed by the new owners.
- Ben and Andy’s apartment, 4/164 Ingles Street, Port Melbourne has the second highest depreciation deductions, with a total of $2,401,413 claimable over the lifetime of the property.
“As the property with the highest amount of total depreciation deductions available, Kim and Chris’s apartment may prove attractive to investors, particularly those who prefer their modern and contemporary styling,” said Bradley Beer, Chief Executive Officer of BMT Tax Depreciation.
“While there are many factors that decide which apartment will achieve the highest price from buyers, the additional cash flow astute property investors receive from depreciation will assist them when crunching their numbers to make purchase decisions.
“While Kim and Chris appear to be the clear winners in terms of unlocked depreciation value – it’s a very close field,” said Mr Beer.
Below is a summary of the depreciation estimates BMT Tax Depreciation found for all five apartments.
The heritage art deco Port Melbourne property, formerly a Symex soap factory, was reportedly purchased by The Block’s production company for around $5 million. The building has undergone an extensive renovation on the show and when finished will be home to five luxury apartments.
Bradley Beer appeared on the show recently to share his expert knowledge with the contestants regarding depreciation deductions for their properties.
As quantity surveyors, BMT Tax Depreciation are uniquely positioned to provide these sort of estimates. Quantity surveyors are one of the few professionals recognised by the Australian Taxation Office as having the appropriate construction costing skills required to estimate building costs for depreciation.