Possibly not without any income.

Don't think that is a good idea Hank – or even possible. Victoria's brother has a disability and is in need of a carer. If he has an intellectual disability then it wouldn't be possible for him to act as a director.

A special disability trust would be much more advantageous because of the ability for the house to be owned by the trustee of the trust and be CGT free. This is not available with discretionary trusts. There are also land tax exemptions which may be available.  The trust is even able to retain income and have it taxed at the beneficiariary's income tax rate – whereas it would be taxed at 46.5% with a discretionary trust.

Victoria even if you don't use the SDT to purchase property now you should nevertheless  look to set one up for your brother so he can take advantage of tax and other benefits.

Richard, Do you think Victoria could borrow as a trustee for a SDT with her brother as beneficiary?

As i type I am thinking and they may have a problem with no rental income, and other restrictions associated with the trust….?

Have you considered doing both?

Buy a main residence, live in it briefly and then move back home and rent it out.

Claim all associated costs and retain the CGT exempt status.

Yes, the land tax office needs to know. They have different criteria too.

In NSW there is a 6 year exemption for absence from the main residence but it is much more complex than the income tax version. Very hard to qualify for too.

I have had a PM from Godhav re a separate matter and and I think he or she is legitimate.

Yes, you can only claim one place as your main residence at any one time. But the election is when you do the tax return after you have sold one. So you should work out which one to claim so that you save the most tax.

Depends on a number of things.

What is ideal from a tax point of view my not be ideal from an asset point of view or land tax or stamp duty etc.

Some things you could look at:
Individual – get the CGT exemption if main residence

Discretionary trust – greatest flexibility, but not able to use any losses to offset your personal income and will pay more land tax in most states.

Fixed Unit trust – may be able to borrow to buy units and claim interest, may get land tax threshold. No asset protection. But may be able to move units to a discretionary trust later on with no stamp duty.

Company – not recomended for tax reasons (unless acting as trustee).

Also consider finance – hardest is the unit trust.

Also consider succession – if you die trust assets don't form part of your will

If there was no section 32 attached to the contract at the time of the contract being entered into then the purchaser may be able to rescind the contract under certain circumstances. So best to seek legal advice asap.

I think your trumpet needs tuning!

Think about this logically.

What if the person were to use extra funds to pay down their home loan and then decide to move out and rent it and to buy a new PPOR?

There would be a huge tax disadvantage.

Also, where is the person supposed to keep their spare cash? in an offset on an investment? this would save them interest which would be deductible and thereby cost them more in tax. Best to have the offset on the non-deductible debt.

For what its worth, I would suggest the OP get an offset and pay all spare cash into it. Ideally then borrow against the PPOR and set up a different split to use a deposit for the investment. If there is not enough equity then maybe have to pay down the PPOR loan a bit.

Having the offset makes it more flexible.