With all of the figures it is difficult to make a structured answer however just a couple of quick points:

1) You mention that you have taken out some money to fund the land purchase. I am unsure how this may have been done i.e redraw, remortgage or separate loan but the interest on the land funds will not be tax deductible. We did a remortgage to release the equity from our existing home.

2) I assume that the old PPOR is in fact in both names as joint tenants. With the varying income levels and marginal tax rates you are both on the deductions will be apportioned accordingly. Can we get this restructured so that we are tenants in common with me holing a 99% share and my wife 1% in order to get the maximum benefit from it? How would we go about this?

3) If you sell the property you are currenting constructing you may well incur GST and CGT on the sale price which may make you think twice. I would rather hold both if possible as I am as sure as you can be (minus the crystal ball) that they are both going to grow well. Also – I work for the building company so therefore I am building the house for $60k less than retail – and I reckon I bought the land for $15k under market value.

Assuming your current PPOR is in an area that you consider will increase in both value and rent why not look to sell the property into a Trust structure borrowing the full amount of the current value and using the surplus funds to pay down your new PPOR loan. How does this work – would I speak to an accountant or financial advisor? How does one go about finding a suitable person?

Sure you may incur some stamp duty on the transfer but given the numbers you may well fund that the figures make the deal both palatable and you reduce the non tax deductible interest on your new home loan mortgage.