A sole trader can get a home loan on the business profit shown in their personal tax returns, usually two years of them, though some lenders accept one. Lenders check how long your ABN has been active, your GST registration, net profit plus add-backs such as depreciation, and whether tax is up to date. Low doc loans fill the gap before returns are lodged.

Sole trader home loan requirements at a glance
Requirement What most lenders look for
ABN history Two years for most full doc loans; one year with some lenders
Income evidence Personal tax returns with the business schedule, and notices of assessment
Income counted Net profit plus add-backs, often the lower or the average of two years
GST Registration expected once turnover reaches $75,000
Tax position Lodged and paid, or on an ATO payment plan

How do lenders work out a sole trader’s income?

They start with the net profit on your tax return and add back costs that do not reduce your ability to repay: depreciation, interest on loans being paid out, one-off expenses and voluntary super. Then they apply their policy on which year to use. The self-employed income calculator shows the add-backs on your own numbers.

Which year will a lender use?

Two sole traders with the same business can get different answers depending on the lender. Suppose your profit plus add-backs was $88,000 two years ago and $101,000 last year:

The same income, three lender policies
Lender policy Income counted Borrowing on our assumptions
Lower of two years $88,000 $359,000
Average of two years $94,500 $394,000
Latest year $101,000 $429,000

Single applicant, no other debts, assessed at 9%. A falling income works the other way: lenders usually take the lower year and may ask why it fell. For the opposite, a real case shows a business owner’s rising profit being checked before a purchase.

Do you need to be registered for GST?

You must register once your annual turnover reaches $75,000. For a full doc loan the tax return matters more than GST status, but low doc lenders usually expect GST registration and recent BAS, because the BAS is part of the income evidence. The BAS income calculator shows how lenders read it.

What if you started trading recently?

  • Under a year: options are limited; a few lenders consider it if you were in the same work as an employee before.
  • One year: some lenders accept one year of returns; others use alt doc evidence.
  • Two years or more: the full range of lenders is open.

If you moved from employee to sole trader in the same trade, such as an electrician going out on their own, say so. Lenders read continuity in the work very differently from a new venture. The home loans for contractors guide covers ABN contractors paid by one client.

What documents should you gather?

  1. Two years of personal tax returns, including the business schedule.
  2. The matching notices of assessment.
  3. Recent BAS and business bank statements, especially for low doc.
  4. An ATO statement showing tax is up to date or on a plan.
  5. An accountant’s letter if the lender asks; see the accountant letter template.

Questions people ask

Can a sole trader get a home loan with one year of tax returns?

Yes, with some lenders, particularly if you worked in the same field before going out on your own.

Can a sole trader use a low doc loan?

Yes. Low doc lenders usually want GST registration, an ABN held for a period and BAS or bank statements; see low doc home loans.

Does my partner’s salary help?

Yes. A PAYG income alongside sole trader income often makes the application stronger and widens the choice of lenders.

Charles Touma works out which year and which add-backs each lender will use before you apply, so a sole trader is matched to the lender that reads the business best. A free 30-minute call covers your returns and borrowing. General information only, not credit or tax advice; lender policies change, and your accountant should confirm how your income is presented.

Sources: ATO, registering for GST; Westpac, broker credit policy summary; Moneysmart, home loans, checked 20 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.