He's lived in it for 2 out of the last 5 years so he gets to take up to $250K (@500K if married) of gain tax free - from the portion of the duplex he lived in. 

It will absolutely supercharge your ability to save for a DP for a 'future' permanent home, or save you hundred of thousands if you decide to get married and have a family and simply get rid of the roommates at that point. 

Before partnering up with someone, consider whether you would marry someone you just met.

I'm married and recently welcomed a beautiful baby boy into the world.  

Marry the Home, Date the rate"....

I will definitely keep you all updated on my journey :)  since you said WE  assume your married if so you get the 500k tax free so the sale of that home free's up a ton of cash.. thats the play..

So a few thoughts:1) You’ve lived and used it for 2 years by now and if you sell it and you are married filing joint you won’t recognize any gain on the sale as your primary residence.  

The couple claims to be married and the wife says she's been a SAHM for 10 years but a quick internet search shows them having seperate addresses 2 years ago. 

I am just referring to the exclusion for $250,000 ($500,000 for married couples) in gains on the sale of a property that was owner occupied for 2 of the past 5 years.

We are not married.