Self-employed, one good year on paper

The situation

Trade income was strong as an employee, and the business carried most clients across. GST-registered from day one, BAS lodged quarterly, a bookkeeper keeping the accounts clean, and a $95,000 deposit saved. He wants to buy a house in the $950,000 range with his partner, who earns $70,000 salaried.

The problem

The two-years-of-financials rule is real at many lenders, but it is a policy, not a law. Waiting a year costs a year of the market, a year of rent, and a year of the partner's clean salary doing nothing on an application. The couple's question is whether one full year of financials can be assessed now without resorting to expensive lending.

What made it difficult

The partial first year drags averages down at any lender that averages two years, so lender selection decides everything. A lender that uses the most recent year, or accepts one year of financials with two years of ABN history, reads this file completely differently from one that averages. Add-backs matter too: depreciation on the van and tools, one-off establishment costs and voluntary super all belong back in the assessable income if the lender's policy allows them. The details are covered in our self-employed lending guide.

What a broker assesses

The full-year financials and the current-year BAS trajectory, a strong year followed by stronger quarters is a very different story from a spike. The split between genuine profit and add-backs. The partner's salary, assessed conventionally. Deposit strength and buffer after settlement. And the honest comparison: what the file gets from a one-year full-doc lender now, versus what waiting for a second year would change, priced, not guessed.

The lending considerations

One-year policies usually want the rest of the file strong: solid deposit, clean credit, sensible loan-to-value. Alt-doc lending, assessed on BAS or an accountant's declaration, exists as a fallback and is legitimate, but it prices higher and should be a considered choice, not a default. The trap to avoid is applying to a two-year lender, collecting a decline enquiry on the file, and then applying elsewhere: assessment order matters.

What borrowers can take from this

If you're self-employed and recently established, the wall you've hit is almost always one lender's policy, not your file. Keep the accounts immaculate, lodged BAS and a clean ATO position are worth real money at assessment. And involve the broker before the accountant finalises the year: legitimate choices about depreciation and super made for tax can quietly cost borrowing power if nobody is looking at both sides.