How to buy a property when self-employed - full doc
Purchasing a home or investment property when you are self-employed is not as hard as you might think. It just requires that you consider your business structure and how you pay yourself out of the business. This will dictate the documentation you need to provide. For instance:
You are a sole trader:
You will need your last 2 years’ personal tax returns and ATO notices of assessment.
You trade through a company:
You will need the company’s last 2 years’ income tax returns and financials (eg. profit and loss statement, balance sheet), plus 2 years of your tax returns and notices of assessment as the director of the company.
This is what we call a Full Doc Loan (if you don’t have these documents, you may qualify for a Low Doc Loan).
Business structures more complex than these are best dealt with by making a quick phone call to SGB Finance. We can discuss your structure with you and then liaise closely with your accountant to get the necessary documentation.
From our extensive experience in lending, we have found there are two objectives that are at odds when it comes to borrowing for a property particularly as a business – lenders wish to see an income that is sufficient to service a loan; however accountants structure your business income in the most effective way possible in order to lower your tax burden.
But don’t be daunted - talk to us first to discuss your future plans for borrowing and we can provide an estimate of the figures you would need to present in order to achieve your borrowing goals.
It can be as quick as 15 minutes to collate all documents needed to let you know how much you can borrow.
Once you have this information, then you can work with your accountant to attain those numbers over time.
Keeping all tax records, lodgements, and payments up to date is critical to a healthy financial position and the ability to prove income when it comes time to borrow.
