1. It’s possible
2. Perhaps
3. No

Yes

Consider then if you are required to be registered

It might be smart for you to uses them as you could borrow 104% potentially.
Whether it is smart for them is another question.

Depends on the situation but yes stamp duty can form part of the costbase.

I am a Sydney based solicitor – what exactly do you need?

You can just look at the law itself. It is pretty clear.
See s110-25 ITAA97
http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/itaa1997240/s110.25.html
Look at the 4th element

no mention of the word “major”

I have about 300+ strategies developed with many of them on tax strategies on CGT, some relating to this are
– move in, main residence, move out and rent
This should only be done if the savings are enough to justify moving twice.

– move in, main residence, move out and into a new main residence and later sell the first one tax free and pay down the new one.
You should seek advice before selling though as it may work out better to keep.

– buy a sacrifical property
Live in property A as the main residence, then buy Property B, live in it and later sell, move back into property A with your extra cash.

etc

You need legal advice in Part IVA being applied to these and other strategies – dont assume the exemption will apply, even if you follow all the legislative rules.

Here is an article I wrote a while back:

The short answer is that you get some CGT relief as the period subject to CGT is apportioned.

Example
Bic Dong purchased a home in 2000 and moved in straight away. It is a small residential block and is his main residence and only property.

On 01 Jan 2004, Bic moves out. He ends up renting a property while renting out his main residence. Mr. Dong then sells the property in 2015.

What happens with the main residence exemption? Because Dong was absent for more than 6 years – he was away for 11 years in total.

Bic must first work out the value of the property when it was first used to produce income which occurred on 01 Jan 2004. He can do this by employing a valuer who will estimate what it was worth back at that point in time.

Then he must work out how long the property was rented for (in days to be exact). 2004 to 2015 is 11 years (approx.). 6 of those 11 years are able to be counted as the main residence. Therefore 6/11th of the gain will be exempt and 5/11ths will be subject to tax.

Let’s add in some values:

2000 $200,000 purchase price

2004 $300,000 value at the date he moved out

2015 $800,000

The capital gain to work the tax out on is $800,000 – $300,000 = $500,000

Some expense can be used to reduce this – agents fees on sale, conveyance on the sale etc, but not stamp duty on the purchase or other purchase costs because Bic is deemed to have acquired the property in 2004 at its value then (s118-192 ITAA97). Also, capital works deductions would need to be added back.

Assuming all these amounts to $30,000 the gain would be $480,000

Then the 50% CGT discount will be applied. $480,000 x 50% = $240,000

Only 5/11ths of this would be taxable = $109,090

$109,090 is the taxable gain that would be added to Bic’s other taxable income for the year. The maximum tax he would pay on this would be $53,454 but he may pay much less if his other income was very low.

Had Bic moved back in before 01 Jan 2010 and then later moved out again, he would not have paid any CGT tax. He didn’t do this because he didn’t want the hassle of having to move.

Had Bic decided not to keep claiming the property as his main residence after moving out (e.g. because he claimed another property) then the cost base for CGT purposes would have been the value at the time of moving out which was $300,000

The CG would have been $800,000 – $300,000 = $500,000

Reduce this by the selling costs of $30,000

$480,000 gain

$240,000 after applying the 50% CGT discount because held longer than 12 months.

Tax would be less than $240,000 x 49% (top rate plus Medicare) = $117,600

See

ATO ID 2003/1113
Income Tax
Capital gains tax: main residence exemption – interaction between the ‘absence’ rule and the ‘first used to produce income’ rule
ATO ID 2003/1113 – Capital gains tax: main residence exemption – interaction between the ‘absence’ rule and the ‘first used to produce income’ rule

Section 118-192 of the Income Tax Assessment Act 1997
INCOME TAX ASSESSMENT ACT 1997 – SECT 118.192 Special rule for first use to produce income

Section 118-145 of the Income Tax Assessment Act 1997
INCOME TAX ASSESSMENT ACT 1997 – SECT 118.145 Absences