220 p/w = 11,440 down the drain each year * 2 years = $22,880.  or a $105,000 loan over 20 years at 8% p/a

You can't buy much with $105,000 so it might be prudent to pay rent until you have to move to ACT
Then buy in ACT $350,000 to $600,000 you may need to borrow more than 260k in canberra.
You may have to look at a unit.

When you move to canberra a lot of people in your situation do the following.
Buy house / unit –
pay off as much as possible while at Canberra .
Then move
Rent out Canberra property

Buy a another property in new location
pay off as much as possible while at new location.
Then move
Rent out old location property

Buy a another property in new location
pay off as much as possible while at new location.
Then move
Rent out old location property

(Previous accidental property investors in Defence force API Magazine)

Depends on how much properties cost at Here. You may be able to buy a Unit and try to pay off as much as possible in the two years and then rent it out and use it as collateral for the Canberra purchase.

I thought of this but wasn't sure if you would get the subsidized help from the defence force if you do this ?
You need to check if this is allowed for the subsidized help.
I think you mean you would move into IP in two years time if so you need to get valuation done for capital gains tax cost base for PPOR cgt exemption status and your records.

You have really answered your question by " you have 18 months before retirement".
Capital gain takes time and you may do a renovation and find the market price for the finished reno is not adequate to make a profit.
So there is a risk that at your time in life you may not be prepared to take.

You are in a real predicament

If you sold all your shares you still have to find $85,000 to pay off the debt shortfall.

Hopefully you have other assets to sell or borrow (not with a margin loan) against to pay off the extra $85,000

short term bridging finance.

Change of status CGT event if you plan on claiming this property as PPOR otherwise you can rent out original PPOR for 7 years and keep it as PPOR CGT Status but then you can't claim IP2 as new PPOR CGT status. Can't claim PPOR for two properties at the same time. Capital gains tax implications.
PPOR

Change of status CGT event if you plan on claiming this property as PPOR otherwise you can rent out original PPOR for 7 years and keep it as PPOR CGT Status but then you can't claim IP2 as new PPOR CGT status. Can't claim PPOR for two properties at the same time. Capital gains tax implications.
IP2-rental —- —- CGT liability-

If you do not get valuations done when you sell in the future you will have a hard time working out the previous values of the properties to work out capital gains tax liabilities and exemptions.

Once you file a tax return from the new IP address now PPOR it will most likely be your evidence that your PPOR has shifted.
However you may need to inform the state revenue office of where your PPOR is for land tax purposes.
 

What is your goal.

Capital Gain – may be a problem

Positive cash flow with building write down depreciation  maybe possible.

With $300 k you may find it hard to enter a city property market.

I am reading a book called The Great Depression Ahead written by Harry S Dent jr
This is going to happen also due to demographics
However this is an American book and it doesn't take into account immigration. As Australia has a larger percentage of immigration when you divide new immigrants / Total Population of the country.

This is a protection factor for Australia as immigrants are usually of a child rearing age and have larger families which creates demand for property and demand for consumer goods.
However in the USA you have a much larger percentage of the population (Baby Boomers) who are retiring and selling their properties and also reducing their cost of living thus causing less demand for consumer products.

Also when industry finally wakes up to itself they will find that they should have been taking on new low skilled employees over the last 5 to 10 years and training them up for when the mass retirements are going to occur from the baby boomers over the next 2 – 5 years..
So when in the future a mass training program will be required the productivity will be lower and help bring on a recession or depression.

If hubby sticks the $260 into super in would be a voluntary contribution and would not change the positive gearing to negative gearing.
However if you (wife) are on a low income and hubby puts money into your super annuation account on your behalf you may qualify for the

Superannuation spouse contribution tax offset

http://www.ato.gov.au/individuals/content.asp?doc=/content/19144.htm

If you spend the $260 per year on an improvement via a small redraw loan via increased interest charge or on a repair or improvement that is a tax deductible expense you will be reducing your net property loss as opposed to net property income.

You  need to seek financial advice from a licensed financial advisor on buying shares with borrowed money as as it is a risker method and may not suit your situation

With a higher risk factor you can borrow money from the house loan with a split loan and put in into shares that pay a dividend and be able to claim the interest of $260 a year as an expense used to earn dividend income.

might be worth discussing with your tax man/ agent as a possible method.

Hubby can claim depreciation if the house if positively geared. You just have to have tax already paid on other incomes.

You can reach a situation when you own a lot of properties were your total depreciation is greater than the amount taxable on your income. So as an example you earn $60,000 p/a but depreciation is $54,000 a year . anymore depreciation above $54,000 would be in the tax free threshold as the first $6000 earned is tax free. Also you have different tax rates in each wage bracket so tax saves reduces as depreciation reduces your taxable income to below the next previous tax scale.

on a tangent

If you do not increase the rent by small amounts each year your tenant gets use to no rental increases and then when you put the rent up a small amount your tenant leaves the property or abandons it (happen to me) . So it is a good idea to condition the tenant to having modest rental increases each year rather than suddenly having a massive rental hike 6 years later when you realise you need to raise the rent to get up to market rent.

If you have a credit limit on any of your cards the mortgage lender will take this as an item to reduce how much you can borrow even if the credit card is empty of debt. You may wish to reduce the credit limits on both credit cards or on the one remaining credit card.
The personal loan will be an item that also reduces how much you can borrow for a house loan !
However the personal loan should have a lower interest rate than the credit cards.

It is a serviced apartment complex you book in for the night . It probably incurs high management fees for you the owner .
see http://www.questknox.com.au/index.site.home.property.21.html

As it was two months ago the penalty is that you have a real headache .
What your penalty is – You cannot Claim the Portion of the IP loan that was the redraw amount interest charges as a tax deductible expense because you used it for a private purpose rather than for an investment purpose.
If you claimed the redraw portion in your last or any previous tax returns then you will have a problem with the ATO.
If you did the wrong thing with your tax return then you could pay a penalty fine up to 25% of what is owing  and interest on the money owing to the ATO
See web links at end of this posting !

So you have to work out how many days in the financial year you had redraw amount.
Then you have to work out or find out from the bank what interest rates were charged on each day as it has been changing lately
Days *of (int 1)x (annual interest rate 1) /365 * redraw amount
plus
Days (of int 2) x (annual interest rate 2)/365 * redraw amount
plus
Days (of int 3) x (annual interest rate 3)/365 * redraw amount

or you might be able to ask the bank if they can calculate the total interest for the financial year for the redraw amount.

Then you need to subtract this amount from the total loan interest on investment property.

You could ask the bank if they can split the loan so as to make working out the portion of redraw easier.
Split >>> Redraw amount / Investment purpose amount
(However it can be complicated see note at end of posting #######)
A line of credit can also split the loan to make it easier at tax time.

Read about proportioning private with investment in the links below
http://www.smh.com.au/articles/2004/08/13/1092340458713.html?from=storylhs
http://www.gadens.com.au/Publications-View.aspx?documentid=36
http://www.renos.com.au/resources/interest-deductions/
http://www.bdo.com.au/media-centre/m_r/qld/10_tax_return_mistakes_to_avoid             point 4

##### if you are paying off principle then the ratio of private / investment can change
The interest is ratio of % of loan that is private and % that is investment and the interest is worked out by total interest* investment ratio with line of credit / private loan. So if you made a payment on the part that is private it changes the ratio amount.

Best to talk to an accountant on how best to work out portioning of private to investment amounts and also on number of days if not whole financial year for private part of loan.