Which years they use
Most lenders want your two most recent personal and business tax returns and notices of assessment. Some average the two years; others use the lower; a few will use the latest year alone if income has grown.
Add-backs
Lenders can add back non-cash and one-off items to your taxable income: depreciation, interest on loans being refinanced, and genuine one-off costs. Super contributions above the minimum may also count. Policies differ widely between lenders.
When income dropped
If one year was lower for a clear reason, such as an equipment purchase or a one-off event, a letter from your accountant explaining it can make a real difference.
If returns aren’t lodged
Low doc lending uses BAS statements, business bank statements or an accountant’s declaration instead. Rates are generally a little higher, and the loan can usually be refinanced once returns are lodged.
General information only. It does not consider your objectives, financial situation or needs. Speak with a licensed adviser and your accountant before acting. See our Disclaimer.
