CGT – Built unit at back of house, then sell front house.

1) short answer, your PPOR is which house you claim you live in. If you keep this property for another 3 years say. Then your still entitled to claim the PPOR excemption when you sell.  Just remember that you therefore won't be entitled for the 3 years for your current home that your living in. You could decide you are never going to sell the current home your in. So having it as your PPOR would just be reducing your available  taxation benefits. A example is a friends parents elderly, that lived in a home but moved out, into a unit that they planned to retire in. 5 years later their home in a prestigious suburb had gone up a lot more then their unit that they had lived in. It made more sense for them to get the CGT exemption for the expensive property for those years as they are never selling their unit till they aren't here anymore. 

1 part b) if you do have to work out the site initial cost price. A simple formula used is purchase price/ land sqm. That'll give you the price u paid per square m. Allocate each block its  individual proportions. That's the cost price for each. 

2) if the equity from the remaining unit is enough to secure the loan then you may use surplus funds for any purpose you want. Some figures of bought sold built for expected sales and values would be helpful. If the unit Is the only property tied to the loan and you have only rented it, then the entire loan should be available as a deduction.