Tax experts have revealed the staggering tax breaks that buyers could get by purchasing one of The Block homes, with millions of dollars in deductions potentially outweighing purchasing costs from day one.
Built from scratch, the five homes all have an identical floorplan but the report shows not some homes offer hundreds of thousands of dollars more in tax depreciations than their neighbours.
Underdogs Sonny and Alicia from House 4 have only won one room reveal, but they top the leaderboard in tax depreciation deductions. Picture: Channel 9/9Now
According to BMT Tax Depreciation, each home could generate between $5.4 million and $6 million in claimable depreciation deductions in their lifetimes.
With each of the five Daylesford properties have a price guide of $3 million to $3.3 million – four times the town’s median house price.
| Rank | House | Depreciation deductions |
| 1 | House 4: Sonny and Alicia | $5,934,256 |
| 2 | House 5: Robby and Mat | $5,670,416 |
| 3 | House 3: Britt and Taz | $5,641,533 |
| 4 | House 1: Emma and Ben | $5,474,110 |
| 5 | House 2: Han and Can | $5,465,637 |
Property investors can claim depreciation deductions for the natural wear and tear of buildings and their assets, according to The Australian Taxation Office.
While all investment property owners can claim deductions, newly built and fully furnished homes like The Block homes come with a chance to maximise returns by allowing buyers to claim both capital works (Division 43) and plant and equipment (Division 40) items.
"Every dollar claimed in tax depreciation reduces taxable income, which means more money stays in the buyer’s hands,” BMT chief executive Bradley Beer said.
The five brand new homes make up part of the new Middleton Field housing estate. Picture: realestate.com.au
“For The Block properties, the deductions don’t just offset the cost – they can outweigh it entirely. That’s an extraordinary edge for investors.
"Across all five properties, the average first-year claim tops $236,000, giving buyers a significant cash-flow advantage from day one."
Topping the list for depreciation deductions was Sonny and Alicia’s House 4 with a whopping $5,934,256 worth of total deductions, equating to a first-year claim of $275,802.
Coming in second is Robby and Matt's House 5 at $5,670,416 in deductions.
At a close third place is House 3, renovated by Britt and Taz with a total of $5,641,533 in deductions.
Britt and Taz's House 3 has $5,641,533 in tax depreciation deductions according to BMT. Picture: Channel 9/9Now
Emma and Ben's House 1 ranked fourth at $5,474,110, and House 2 Han and Can came in fifth with $5,465,637 in deductions.
"For buyers, understanding the true financial value of these deductions is game-changing," Mr Beer said.
"It turns prestige properties into powerful, high-yielding investments."
Buyer’s agent and The Block regular Frank Valentic said The Block homes’ depreciation schedules are the biggest he had ever seen.
“When you buy apartments, you might get $20,000 to $30,000 a year, when you buy a new house, you might get $50,000 to $70,000 for the larger houses, but none like this – this is obviously off the charts,” he said.
“Obviously there is a lot of extras that are thrown into The Block properties. [A home builder] definitely wouldn’t be putting $5 million into a house and then selling it for $3 million.
“There is obviously a lot of add ons, the sponsorships and that sort of stuff to be able to do that.”
Buyer’s advocate Frank Valentic will be bidding at The Block auction for investors.
Mr Valentic said the huge depreciation schedules had strong appeal to his clients.
“Most of my investors actually have kept them [the Block homes]. They haven't sold them like Danny Wallis goes in and sells them like a new car,” he said.
The Block homes are set to go under the hammer this Saturday, with the finale hitting TV screens Sunday night.
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