Your screenshot doesn’t really make it clear what’s happening. Make sure your block is a single tile, not split up into several. Since you have a bunch of padding around your block, I suspect you may have set the tileset’s tile size too small, causing the tile to be sliced up into four tiles instead.
To clarify: the padding itself is not a problem, and may even be desirable if you want to eventually have tiles that have bits sticking off the tiles, which is common for isometric tiles. What’s important is that you set your tileset’s tile size appropriately so that it’s sliced up correctly, with one drawn tile per Tiled tile. You may need to use the drawing offset property on the Tileset to position the tiles correctly on maps, but Tiled can use tiles with padding no problem. The problem was that you didn’t account for the padding when setting up your tileset initially.