Building a PPOR for later investment

I am wondering if someone can help clear up a bit of confusion I am having with this scenario I am trying to map out.

I am interested in knocking down and rebuilding Mum's old weatherboard house (which she's owns completely) and building a 2 storey house on the property. I would be the one paying for the 100% construction and building it myself (I'm a Licensed Builder). I will be making the upstairs area a completely separate habitable area for myself, wife and daughter.

Mum's house was valued by the banks in late 2009 at $615,000 and it is in the Eastern Suburbs of Sydney. My questions I need help clearing up are:

1. I would be adding my name to the title of the property as a percentage owner but what percentage would I be? (she is fine with this)

2. It is obvious that once completed the property is going to be worth a lot more then $615,000 when new 2 bedroom apartments in the area are worth more then that now. How would you calculate my equity in the property? Is it any dollar amount over the valuation prior to the new house being built?

3. Does the government still give out the FHOG and are there any finance structures/benefits I could take advantage of in a situation like this?

I need to know this because I have 2 brothers and there is obviously going to be a time when mum's estate will have to divided up against the 3 of us and as I will already have a share, I need to give them 2/3 of mum's share and the other 1/3 goes to me. I see this as a good investment as it allows me to have the house I want in the area of Sydney I love and know I could never afford to own a PPOR in and not tie me down to a huge level of debt.

Thanks for your help