Firstly, I would suggest you not believe anything a bank tells you without checking. They tend to be wrong!

I would suggest you set it up something similar to this:
1. LOC1 on the existing PPOR
2. LOC 2 on the existing PPOR
3. Change existing loan to IO for maximum period
4. Set up a new loan secured only on the new property. IO
5. Set up an offset account attached to loan 3.

Since you are planning on moving out of the PPOR you would want to stop paying this off. You would also want to slowly increase this loan by paying the interest on it by borrowing from LOC1. Place all spare cash into the offset account.

When you find the new property borrow 80% as a stand alone loan and use the deposit from LOC2. This way the two properties are not cross secured and you can free up cash. If you move into the new property then attach the offset to the new loan (no 5).

You should be able to get up to 6 loans on the breakfree package.

Although tax deductibility doesn't depend who is on the loan it may still be a good idea to get the loan only in one name, if you can service, as this will help serviceability in the future.

This is why it is a good idea to use a broker. A small mistake can cost thousands.

No. assmung you mean the offset is in the personal name. If the SMSF had a loan for a property and had its own offset account then it would be ok

The trustee would be breaching their fiduciary duties. There would also be legislative restrictions against it.

Doesn't sound like an offset to me. Sounds like a redraw.
You had better check with them whether it has a separate account number to the loan. If it doesn't then be careful because you could get into a tax mess if you were to treat it as an offset.

I suspect that so-called offset account is just a redraw facility. Is there a separate account for the offset, ie a separate loan number? If not then it would not be an offset.

If it is not an offset, then unfortunately you have paid down the loan and taking the money out would be new borrowings and therefore the interest would only be deductible if the money was used for investment purposes.

I gave the reason not to join the two loans. If you mean cross collateralise the loans, then don't do this either.

Imagine you later decide you want to sell one, but the main loan for this one is secured by both properties. You will thereby need the banks permission to sell. They will need to do a valuation and reassess your loan. If the remaining property has dropped in value then they may require a cash payment to release the 2nd property. LVRs must be kept within limits. If you had stand alone loans this would not be a problem.

see my answer to Zara's post. https://www.propertyinvesting.com/forums/getting-technical/finance/4332871?#comment-214928

I wish the bank would service my loans. I have to pay them myself for some reason.

I am confused by your post, but if you buy a $300,000 property with a $300,000 loan and deposit $60,000 then you would probably have close to $60,000 equity – maybe more because equity = value less loan.

Villas would be counted. Land tax is payable on the land component only. Main residences are usually exempt and investment properties up to a certain value are exempt. I am not sure of the rules for WA, but in NSW there is no exemption for trusts.

eg. In NSW  you owned a house worth $500,000 with a land value of $300,000 there would be no land tax payable, where is if this was held in a trust then 1.6% pa = $4800 would be payable every year. Huge impact.

Please get proper advice before you do that.

Firstly there will be little asset protection, especially in the early years, because of the clawback provisions of the bankruptcy act.
Land tax may also be payable where it otherwise wouldn't be. If you will continue to live in the house, then there are many legal implications involved as well as tax implications. And losses of the trust cannot be used to offset personal income.

So, firstly I would see a lawyer. You will need them to do the conveyancing too. You will need to transfer from yourself to the trustees (even if still yourself), discharge loans and then reapply again. so you may be up for buy/sell conveyancing fees, loan exit and application fees, stamp duty and valuation fee (for stamp duty).

You will also lose the main residence CGT exemption.