Self-Employed
What lenders really look at on your tax return
5 min read · By Jamee White, CPA · 18 February 2026
The short version
- Lenders read net profit, salary, dividends and retained earnings, then average years.
- Add-backs like depreciation can lift your assessable income materially.
- Declining profit and mixed personal/business spending hurt applications.
- Lender selection often changes the outcome with the same numbers.
If you're self-employed, the tax return you optimise for the ATO is the same one a lender uses to size your home loan. That's the tension at the heart of self-employed lending, and the reason a good broker can change the outcome by a few hundred thousand dollars without you changing a single number.
What lenders read
Net profit (sole trader) or company profit + director's salary + dividends + retained earnings (Pty Ltd). Then they average the last two years (most lenders) or use the most recent year (some lenders, for growing businesses).
What they add back
To lift your assessable income, lenders may add back: depreciation, one-off expenses, non-cash deductions (CGT, asset write-offs), additional super contributions, and owner's wages paid to a spouse. Done well, add-backs can lift assessable income by 20–40%.
What kills deals
Trending down (year 2 lower than year 1), heavy personal use of the company car booked as a business expense, large director loan accounts, and mixed personal/business on a single account. These don't mean you can't borrow; they mean you need the right lender.
The fastest fix for most self-employed applicants is lender selection: low-doc lenders that accept BAS or an accountant's letter, full-doc lenders that accept one year of returns, or full-doc lenders that handle complex trust structures cleanly. Different lender, different answer, same numbers.
Run the numbers
Frequently asked questions
How many years of tax returns do I need to get a home loan when self-employed?
Most full-doc lenders want the last two years of returns and financials, though some accept one year for established or growing businesses. Low-doc options may use BAS statements or an accountant's declaration instead. Requirements vary by lender.
Can I get a loan if my latest year was lower than the year before?
Yes, but a declining trend makes some lenders cautious because they often use the lower or averaged figure. The right lender, and a clear explanation of any one-off causes, makes a big difference.
What is a low-doc loan?
A low-doc loan lets self-employed borrowers verify income with alternative documents, such as BAS or an accountant's letter, rather than full tax returns. They can carry different rates or terms, so they suit specific situations rather than everyone.
