Can I use BAS statements instead of tax returns for a home loan?

Lenders read the G1 total sales figure on each BAS, add the quarters or months together, and annualise. They then apply a margin that reflects what a business in your industry typically keeps as profit: a consultant with no stock might be assessed at 70 per cent of turnover, a cafe at 30 to 40 per cent, a tradesperson at 50 to 60. Some lenders let the accountant nominate the margin with justification. Others ignore turnover and take GST paid, multiply it out to gross sales, and apply the margin from there. The result is the income used for serviceability.

Lodged on time with the ATO, showing consistent turnover without a sudden spike in the most recent quarter, and matching the business bank statements the lender will also request. A BAS that shows turnover trending down will be assessed on the lower recent quarters. Lenders will also check that the GST and PAYG withholding shown as payable has actually been paid, because unpaid BAS liabilities are a tax debt.

It suits established businesses whose tax returns lag reality: the business has grown, the last return is eighteen months old, and the BAS shows the current picture. It also suits borrowers whose accountant has legitimately minimised taxable income through deductions, so the returns understate capacity. It does not suit businesses under the GST threshold that are not registered, or brand new businesses without lodged BAS.

Alt doc loans carry a slightly higher rate than full doc loans, and the LVR is usually capped at 80 per cent. Cash out may be restricted. The income figure from the margin method can be lower than the accountant's view of profit, so for a borrower with strong returns, full doc is still the better path. A specialist will run both and tell you which produces the higher borrowing capacity.