This week’s episode we’re chatting to Bianca Hartge-Hazelman from Financy.
About Bianca Hartge-Hazelman
Bianca is a financial journalist and made the decision to start Financy, a women’s money and finance magazine online, earlier this year. Leaving her job at the Australian Financial Review, she took the plunge into her own business and has proved to be extremely successful with Financy.
You can check out Financy’s website here.
What is Financy’s niche?
We have male and female contributors, but the platform itself is for women. It’s about educating and informing women who want to take action now with their money and financial decisions. We write about everything from superannuation to property, cash, financial stress, financial abuse, maternity/paternity – paid parental leave, pay, style and fashion!
I was always writing and interviewing so many incredible investors and bankers and I just felt like I was speaking predominantly to men and that I wasn’t interviewing enough women, so I asked myself why? That, of course, covered this gap we find in financial literacy, along with the gaps in average on pay (in certain sectors), retirement gaps and all these different things.
Bianca’s ‘why’? Of course, for me, being a mum of girls is what gives me that kind of push towards what I write about. I have a hope that I help people foster a better financial future in an entertaining way.
On the property side of things, what’s your opinion in regards to the rental system?
I made the financial decision to leave Sydney but I still own property there. Renting there gave me tax benefits because I run a home office. At the same time, we are eligible for the 6-year exemption, so our principal place of residence, which is in Sydney, affords us the ability to quite easily rent here. For me, that was an easy decision to make.
In regards to the Sydney property market, it comes down to doing the math of what the rent is vs. the mortgage and understanding which one suits your lifestyle better.
What is the 6-year exemption?
Bianca mentioned that she had an investment property in Sydney and was renting elsewhere using a 6-year exemption on capital gains tax.
In general, your primary residence is exempt from capital gains tax. But if you have an investment property, which you’re renting or earning an income from, that has to be counted as an investment which you pay tax on.
The ATO has a classification around this. If you are living in your home and you have to move interstate or go away, you can rent your primary residence out and you have six years to do that, without being charged the capital gains tax. Typically, if you’re going on a two-year contract overseas or interstate, you can keep your home, rent it out and earn and income. As long as you don’t buy another property, you won’t need to pay capital gains tax on that. You can move back in or out and start a new six-year period. As long as your absence is less than six years, you can use this strategy.
The major rules are:
- You can only have one primary residence at one point in time.
- If you buy interstate when you move, the 6-year exemption rule won’t apply anymore. But you do have a six-month exemption which you can sell it in and not pay capital gains tax.
- The other is that the property you are renting out has to be a personal place of residence. You can’t have it as an investment and then try and move in as a personal place of residence.
This is a tricky area, so seek advice before you implement this. You can also listen to our next episode where we discuss capital gains tax in a bit more detail.
Do you have any rules of thumb to go by when buying a property?
I’m looking for location! You want to buy where other people want to be, there are good employment prospects, people are moving and the suburb has a vibe about it. Those elements are key.
I’m currently looking at a property where I love the outlook, view and size of the land, but it’s directly under a flight path, which may not bother some people – but for me, it does.
So when I say location, it’s a matter of looking at a few factors that come into play.
What are some of the biggest mistakes you’ve seen people make?
- It’s always about saving! Trying to begin to save when you’re not earning that money can be quite hard. But it’s a mindset and thinking about what you’d like to do and how you’re going to get there. Often there are compromises you can make in order to save more money; however, a lot of people don’t want to make these.
- Getting down on the property price. Don’t look at it as if it’s completely out of reach, that is leading to people giving up entirely. We’re seeing more Australians travel overseas and preferring to spend that house deposit to do so. But in regards to that feeling of being sad about the property market, it’s wise to think, maybe property prices won’t always stay the way they are. Consider other property options as it’s not a one size fits all headline, as there are different spaces that present opportunities.
What are the three tips you’d give to get into property?
- Save now or start thinking now about it if you want to get into property
- Think outside the box when it comes to location. If you’re not willing to negotiate then…
- Consider Rentvesting, but flipping it. Take advantage of the rates and try to get into a location you like and potentially rent it out. There are lots of considerations to take into account, especially if you’re a first home buyer. But at the same time, don’t be scared of these factors.
The Rentvesting Podcast, available on iTunes, was created by Red & Co’s Jayden Vecchio and expert financial planner Louis Strange. Together, Jayden and Louis unpack the facts behind the property market, explain what’s really going on & where the market is heading. They believe in challenging the status quo and want to get out there to educate absolutely anyone looking to enter the property market.