Does anyone know if there is a problem with buying a car in one state then living with it in another?? ie. buying a car in sydney then driving it to live in canberra?

I don't think there's a problem.
Remember that if you live in Canberra you are only straight up the road from Sydney anyway! You can hop back and forth over the border okay.
We live in country NSW, just outside Canberra, and spend most of our free time there for shopping, restaurants etc.
Most things vary from state to state (or Territory as in Canberra's case). If you bought a car later on in Canberra you would register it there.
By the way, if you have children, Canberra is a great place to bring up kids - lots of schools, open spaces, bicycle paths, free events etc.

Try the Canberra Times website for lots of info:

http://canberra.yourguide.com.au/

You would probably have to re-register it in the state in which you live. That also requires changing the number plates. Not sure of the cost but I'd expect a few hundred dollars.

Worth checking out the ACT website at: http://www.rego.act.gov.au/registrat...interstate.htm

Below is current info:

"Buying an Interstate Vehicle


Information on establishing a vehicle registration in the ACT when buying a vehicle from interstate.
If you acquire, or become the operator of, an interstate vehicle, you must establish the vehicle registration in the ACT within one month of the purchase date. An establishment fee is payable.

For passenger vehicles with a purchase price or market value of less than $45,000 duty is payable at the rate of $3.00 for every $100.00 or part thereof. For passenger vehicles with a purchase price or market value of more than $45,000, duty is payable at a rate of $5.00 for every $100.00 or part thereof. The market value or purchase price must include GST, trade-in allowance, fleet discounts, accessories, any additions to the vehicle and equipment attached to the cab chassis e.g. tipper body or tray. An administration fee applies.

Sounds as though it could be expensive.

Couldn't you hire a car in Sydney then buy in Canberra if that's where you intend to live?

I think that many of those costs are ones that simply apply to buying a car, and not exclusively to the cost of moving interstate; despite the wording on the ACT site