In that case the interest on the LOC would likely NOT be deductible. see:
TD 2011/D8

Income tax: does a taxpayer's purpose of 'paying their home loan off sooner' mean that Part IVA of the Income Tax Assessment Act 1936 cannot apply to an 'investment loan interest payment arrangement' of the type described in this Taxation Determination?
http://law.ato.gov.au/atolaw/view.htm?docid=%22DXT%2FTD2011D8%2FNAT%2FATO%2F00001%22

Depends on many factors such as the reason for doing this.

I beleive you can count the whole 6 years exempt – as long as you can meet the other conditions.

I was going to suggest the benefits of living in it include keeping it CGT free when you rent it out – for up to 6 years. No need to move back in either, but if you moved in and out the exemption could continue for another 6 years.

Also, the loan set up is good, but have you considered trying to get a 90 or even 95% LVR. LMI would be payable, but this would be deductible over 5 years, after you move out, and you may be able to cap the LMI into the loan so you don't need to pay it in cash. All of this will free up more cash for your future PPOR and would be more tax effective. You just have to weigh up the costs v the benefits.

Mike is perhaps inspired by the Dao De Jing:

?????????
Those that know do not speak, those that speak do not know

Mike

Something happened to your post – it appears to be nothing but a quote of the opening post.

In QLD I don't think you can transfer between spouses without stamp duty – unless main residence.

But you could buy out your spouse's share. She would pay CGT and you stamp duty, but it would release funds which could be paid down on your non deductible debt and then you could borrow to buy her share and claim the interest and thereby increase tax deductions overall. Do the sums.

With super there are different stages or phases – the accumulation phase up until 'retirement' and then the 'pension phase' once you meet certain criteria – usually age of 55+ but rising to 60. Another is if you have a serious disability or illness.

The income of the fund is taxed differently in each phase.

That would be correct.

But it is not tax effective. It is bad advice.

You need to carefully consider succession planning. Super doesn't form part of your estate. Although you can direct that it goes into your estate.

Make sure you have a company as trustee (90% don't apparently) and have binding death benefit nominations. Consider succession of the company as well as the trust and also consider the taxation implications of who the super proceeds goes to. Dependents are taxed differently from non dependants.