Self-employed home loan with one year of tax returns: what are your options?

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

Yes, it’s possible, but the field narrows. A lot of mainstream lender policy is written around two years of self-employed income, so one year of returns takes you out of the easy lane. It doesn’t take you out of the game. Some specialist and non-bank lenders will assess a borrower with around 12 months of trading, and the rest of your file does the heavy lifting.

If you’ve only been on your own for about a year, or you’ve just swapped a payslip for an ABN, the question isn’t really “will any lender back me?” It’s “which lender’s policy matches my situation, and what do I need to show them?” That’s what this guide works through.

Why do lenders want two years in the first place?

Lenders have to take “reasonable steps to verify a consumer’s financial situation”, in ASIC’s words on responsible lending. For an employee, a few payslips do it. For a business owner, the best evidence is a lodged tax return and a notice of assessment from the ATO, and a second year shows income is repeatable rather than a lucky first twelve months.

One year of returns doesn’t fail that test, it just leaves less proof. So the job is to replace missing history with other evidence a lender can verify.

Which three clocks do lenders check?

This is the part most online answers blur together. Lenders typically look at three different timelines:

Clock	What they’re checking	Where they see it
ABN age	How long the business has existed	ABN Lookup shows ABN and GST registration dates
Returns lodged	How many years of assessed income exist	Notices of assessment, tax return
Industry experience	Whether you’re new to the work or just new to working for yourself	Payslips, employment history, qualifications, contracts

You can be strong on one and weak on another. A plumber with 12 years as an employee and a 14-month-old ABN is a very different proposition to someone who started a new business in an unfamiliar industry last year. Say which one you are, early, because a good broker will pitch the file very differently.

What do lenders accept instead of a second tax return?

Where a second return isn’t there, policy usually leans on a combination of the following:

• BAS lodgements. Several consecutive quarters, lodged on time, show turnover and consistency. Our guide on getting your BAS and financial statements shows where to find them.
• Business bank statements. Six months or more of statements showing income landing regularly. Keep business and personal spending apart if you can.
• An accountant’s letter. A registered accountant confirming your trading history and income. We cover what it should say in how to get a letter from your accountant.
• Prior employment in the same industry. Payslips and a PAYG summary from your old job make the move to an ABN look like a continuation, not a leap.
• Contracts and client evidence. Signed work, repeat customers, or a retainer, particularly for contractors.
• A larger deposit. More equity lowers the lender’s risk, which is often what makes a short history acceptable.

Low doc loans exist for exactly this reason. As Moneysmart notes, they use less paperwork to verify income and are mainly used by self-employed people, though lenders still make inquiries about your finances. Our explainer on low doc vs full doc loans covers the trade-offs.

Want a sense of which lane your file sits in? You can check your options on our apply page in about a minute, without a credit check at the enquiry stage.

What if I’ve just moved from PAYG to an ABN?

This is the most common version of the question, and it’s usually the easiest to explain. Lenders care less about the date on your ABN and more about whether your income is continuous. A few things help:

1. Show the handover. Your last payslips and the first invoices or contracts as a business owner tell a continuous story.
2. Stay in your lane. Same trade, same clients or sector, similar earnings. A lender can see why this should work.
3. Keep lodging on time. Unlodged BAS or a late return will undo good work quickly. The ATO’s overdue returns page is a reminder of how seriously lodgment is treated.
4. Be honest about the dip. First-year income is often lower than a salary. An accountant’s note about start-up costs and a rising BAS trend does more for you than silence.

How does restructuring from sole trader to company change things?

Lots of owners incorporate in the first or second year, and it’s often sensible for tax and risk reasons. For lending, though, a company is a new entity: a new ABN, a new set of financials and a fresh lodgment trail. Some lenders will recognise the continuity of a business that simply changed structure, while others start counting again.

If a home purchase or refinance is on the horizon in the next year or so, ask your accountant and a broker, in that order, whether the timing of any restructure will cost you borrowing options. It’s a five-minute conversation that can save months.

Which date matters right now: the 31 October deadline?

Today is late October, and individuals who lodge their own return generally have until 31 October to lodge the 2025–26 year, with different arrangements if you use a registered tax agent. If you’re a first-year sole trader waiting on that return, two things follow:

• Lodging it creates the notice of assessment lenders ask for. Until it exists, your “one year” is mostly a promise on paper.
• If you have an earlier return still overdue, the ATO treats that as a priority, and lenders do too.

Talk to your agent about timing now, particularly if you want to apply for a loan in the new year.

A worked example (illustrative only)

Take a self-employed electrician who left a wage job in the same trade about 14 months ago. They’ve lodged one return, have four on-time BAS, a steady run of invoices from the same three builders, and about 20% of a deposit saved. A bank that wants two years may say no on policy alone. A lender that looks at BAS, bank statements, an accountant’s letter and a decade of employment history in the trade may well say yes, possibly with a different structure or a larger deposit. Same person, different policy, different answer.

What should I do if the bank has already said no?

1. Ask why. Was it ABN age, returns lodged, serviceability, the deposit or something on your credit file? The reason decides the next move.
2. Don’t apply everywhere. Our guide on why you shouldn’t apply for loans everywhere explains how enquiries stack up.
3. Fix what can be fixed. Lodge anything outstanding, tidy your statements and get the accountant’s letter lined up.
4. Match the file to the policy. Alternative-doc, specialist and non-bank lenders write for short histories.
5. Consider a bridge. If timing is the real issue, a short private loan secured on property can buy time until you can refinance on full doc. Our page on private mortgages for the self-employed explains how that works, and why you want a clear exit before you start.

For more on borrowing in a thin-file situation, see difficult home loans and home loans for new business owners.

Is it worth waiting for the second year?

Sometimes. If you’re not up against a contract date, waiting can widen your choices and tidy your file. But waiting is not free: a rising market, a rental you’re sick of paying, a property you can’t hold, or a loan that has to be refinanced now all have a cost. The sensible approach is to find out what’s possible today, then decide whether the wait is worth it, rather than assume.

Sounds like you need a self-employed home loan that works with a short history

We’re the lending experts in exactly this: self-employed borrowers with one year of returns, a new ABN or a bank decline on file. Enquiring takes about 60 seconds and won’t touch your credit file, and we don’t send your details to a pile of lenders. A real person reads your situation and calls you to talk it through. Please fill the form in accurately so we can match the right option first time.

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