Can I collect rent if I claim the FHBG?

Alex, you can claim the FHBG, but it would be best to do all that through your solicitor to make sure it's all done properly. You can also rent out your PPoR while you are living in it, and still keep your CGT free status for six years. It may be better to start living there by yourself for a month to establish it's credentials as your PPoR, but after that you have six years. All you have to do after that period is kick your boarders out for another month, and it resets again. I used to think the six year rule was only for when you were overseas etc, but I'm told by my accountant that you can still live in it and claim that rule. (You can't have any other property as your PPoR at the same time of course).
 If for example you get two boarders sharing with you, then you can also claim two thirds of the rates and interest as a deduction. You'll have to declare their rent as income of course, but it's probably much in your favour, as it will be net negative in the current climate. You can probably claim proportionate depreciation as well.

Luke, I'm pretty sure you now have to live in it for six months. Some people may get away with not doing that, but I've heard of some having to pay it back , for not conforming to the six month rule.

That's ok Alex, but remember you can only rent it out for six years with PPoR status, provided you don't have another ppor. You only have to live in for about 1 month to show ppor status. The six months is for the FHBG. You only have to live in it for another month in six years time to reset your ppor status. There's nothing wrong with the sharing concept. That's what I'm trying to get my kids to do. It's ok while they're single, but it's no fun when you're newly married and trying to put up with boarders. (that's what I did for six weeks and it s'd big time!)

Hi Terry, I'm just going off what my accountant has told me:

"I have tested the Tax Office on quite a few cases and they seem to be happy
with no need for having to move away etc to get the 6 year rule. With the
large property value increases in recent times I am always cautious as to
how they will try and attack CGT, but they seem to be fairly relaxed in the
6 year rule (at this stage….)."

I'd like to know for sure though.

I've just finished reading Noel W's new book on saving tax on your investment property, and he's quite adamant that you need to be absent from your property for the six year rule to apply. Noel states that if you get in boarders in the first six months your PPoR instantly converts to an IP and it loses CGT exemption from that date onwards. He suggests house swapping with a mate afer six months is a good strategy, but it might look a bit obvious to the ATO if you're each in one half of the same duplex (as he suggests).
  I believe that house swapping with a mate is identical to simply moving out of your PPoR, renting it out and renting any other property anywhere for yourself. The latter might save your friendship too!