Did you know that you can use your 2021 tax return in isolation if you had a particularly good year?
For standard loans, most lenders will require your two most recent pay-slips and most recent payment summary. However, if you are self-employed, the normal requirement is to provide at least the last two year’s tax returns and financial statements, which would be averaged to determine the assessable income, or if one of the years was considerably lower, they will take that year as the figure.
The good news is that some lenders will accept one year’s tax return. This is helpful if you had a bad year the year before or only recently started your own business, and will help you boost your borrowing capacity. This is particularly helpful given we’ve just finished a financial year, so your 2021 tax return will be accepted by these certain lenders.
It’s no secret that a growing number of people are choosing to work for themselves since COVID has changed their working landscape. Lenders are recognizing and accommodating the rise in entrepreneurs but still want to see that you have at least 18 months to 2 years of ABN registration. They are looking for financial stability and the ability to prove this through your tax returns.
Your last tax return may be your golden ticket!
If you have had a really good year and your 2021 tax return reflects this then give us a call and we can chat about the borrowing options available to you.