There is nothing you need to do other than move in! (but kicking the tenants out before would help i guess)

Future CGT will depend on the %  of time the place was rented and this is covered under s118-185 of the ITAA 97
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.185.html

So you have a  loan of $60,000 and just intend to let it capitalise and intend to pay all expenses from this account too? There is no other loan on the property.

It should be ok generally I think, ATO have a ruling out that capitalised interest retains its characters. So if the interest is deductible the capitalised interest should also be deductible. see TD 2008/27
http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD200827/NAT/ATO/00001

But you have to be careful as the ATO can consider this a scheme with a dominant purposes to save tax and they could apply part IVA of the ITAA and deny deductibility. So don't do this on your own, but see tax advice.

See this Private Binding Ruling where a similar,  (but different) scheme was denied:
PBR 1011345133229    http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/1011345133229.htm

while I am at it see these other ones where it was accepted:

Capitalising interest on a LOC    PBR 93707    http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/93707.htm
Capitalising interest    PBR 94313    http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/94313.htm
Capitalising interest on a LOC    PBR 93035    http://www.ato.gov.au/rba/content.asp?doc=/RBA/Content/93035.htm

I think that should be ok. If you are going to be using the LOC to pay interest on your investment loan, or let it capitalise then you should seek professional advice – and you should look into this as it can save you thousands.

With a discretionary trust no one person owns anything. No one has an interest in the property of the trust (until a trustee has made a resolution to distribute.

This is very important for asset protection reasons because if you are a beneficiary of a trust and go bankrupt, the assets of the trust aren’t available to your creditors. There are some exceptions to this so careful planning on setting up the trust and its usage is needed.

The discretionary nature is also very important for tax minimisation reasons. The trustee can decide who to make distributions to and this can vary each year. What normally happens is that the family members with the lowest income receive distributions first as they will pay no or less tax and this can result in considerable savings.

Also assets held by a trust do not fall into your estate on death. So you can avoid challenges to the will and ownership need to change on death.

ATO are interested in what the money is borrowed for.

eg If you took out a $500,000 loan to buy a property in 1980 and then paid it down to $400,000 1 day later and then withdrew $100,000 for a car – the interest on the money used to borrow the car won't be deductible but the interest associated with the house may be if it later becomes a rental.

They do audit and ask about loans and if they have increased etc.

It depends how you use it.

If you were to deposit wage in and take it out every week, then you could quickly end up with a large loan and no interest on it being deductible.

How can you buy from yourself?

You can sell something you own to yourself as trustee though. Then you will have problems with losses trapped in the trust though.

broadly:

Costs are deducted from gains first. Then the 50% discount is applied. The gain is then added to your other personal income.

the stamp duty act for WA should tell you.

What about talking to a lawyer about partitioning the land. You can buy 50% now and enter into a deed of partition with your mum. You then later divide the land and can do so without stamp duty if the portions transferred as the same as the partition agreement.

Otherwise you may find you pay stamp duty going in and then stamp duty on subdivision as well as you will be changing ownership then.