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Jamie P.
Jamie P.
Newtown, NSW

I’ve been contracting for the same 3 business for 3 years and averaging around $130,000 a year. Will I need tax returns to obtain a home loan or will letters from the business owner be enough?

last week


Hi Jamie,

I'm presuming you invoice to these three businesses via your A.B.N so are self employed. If I've got that correct, there's three paths you can take to get a home loan:

1. Provide your last two years tax returns.
2. Provide just your 2017 tax return.
3. A low doc option where you and your accountant self declare your income.

All three are achievable but there's a fair difference in interest rates with option 1 being the cheapest option and option 3 the most expensive.

If you want to discuss this further, feel free to get in contact with me.

Kind regards,

Tim Russell
*** ****

Hi Jamie,
It appears that you are using your ABN to invoice these three businesses rather than receiving payslips from each?
As a self employed borrower, you could verify your income in a number of different ways.
There are many lenders who only need one tax return, however you must also provide the notice of assessment to verify the return. If you haven’t done tax returns the rate will likely be higher.
I would recommend you sit with an experienced broker who will collect all of your financial information to assess and decide upon the most suitable path to take. Your income isn’t the only variable in deciding your suitability for a loan so it is not possible to say whether you will be ok without understanding a lot more.
Best of luck with your search

Hi Jamie, if you have not done your tax returns then you have a problem waiting to happen.

based on $130k profit as a sole trader x 3 years you have a $35 -40k tax bill x 3 coming your way.

The reason this is relevant is that many banks now require you to lodge a declaration that your tax affairs are up to date, and to make things even more complicated, any outstanding debts with the ATO will show up on your credit checks, unless you have them under a payment arrangement.

soooo, the best thing you can do is have a chat with your accountant about getting yourself up to date with the ATO.

good luck

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