When you’re self-employed and looking for a home loan, using your Business Activity Statement (BAS) can be a straightforward way to demonstrate your income. Instead of relying on tax returns or company financials that may be months old, lenders can use your recent BAS lodgements to get a current picture of your business earnings.
How BAS statement home loans work
A BAS statement home loan is a type of low-documentation loan designed for self-employed borrowers. The lender assesses your income based on the business activity statements you submit to the Australian Taxation Office. You’ll typically provide your BAS for a set period, often covering 12 months, though some lenders may accept less. The key is that the income you report in your BAS reflects what your business is actually earning right now.
The lender will look at your total sales or gross income, then apply a conservative percentage to estimate your taxable income. This percentage varies between lenders, but a common starting point is to treat around 50% of the gross income as your income for loan serviceability. From that figure, they deduct your ongoing expenses and other debts to arrive at your borrowing capacity.
How much can you borrow using BAS as income evidence?
Your borrowing power is based on the income the lender can verify from your BAS, minus your living expenses and other commitments. There isn’t a single formula that applies to every lender, and the final amount will depend on the lender’s assessment rate, your deposit size, and your overall financial position.
As a rough guide, if your BAS shows $120,000 in gross revenue over the year and the lender uses 50% as your assessable income, they would work with $60,000. From there, they deduct a standard living allowance (often the Household Expenditure Measure) and any existing loan or credit card repayments. The remaining monthly surplus determines how much you could borrow.
Keep in mind that each lender sets its own policies, and the percentage applied to your BAS revenue can differ. Some may use a higher or lower figure depending on your industry or the stability of your income.
While MoneySmart reminds home buyers that “small differences in interest rates, costs, and repayments can make a difference over the life of your home loan,” the same principle applies to how your income is assessed. Shopping around or using a mortgage broker can help you find a lender that calculates your BAS income in a way that works better for your situation.
We help self-employed borrowers understand their options when it comes to BAS statement home loans. While we don’t lend money ourselves and can’t promise approval or a specific outcome, we can guide you through how the assessment works and connect you with relevant lending scenarios.