Updated October 2026 · General information for self-employed Australians.
You've been in business for years. You pay your bills, you invoice on time, your accountant likes you (mostly). So surely a nice letter from that accountant saying "yes, this person earns plenty" should be enough for a home loan? It's a fair question, and the answer is a little more nuanced than a letter and a handshake: usually not on its own, and importantly, with 3+ years of trading you probably don't need to go down that road anyway.
The short answer
An accountant's letter or declaration is a supporting document, not a magic key. Most lenders that accept one use it together with other evidence, such as Business Activity Statements (BAS), business bank statements and an ABN that has been active for a minimum period. Only a small number of lenders will consider a letter as the main proof of income, and those are generally specialist low-doc lenders with stricter conditions.
And here's the twist: because you've been self-employed for three years or more, you likely qualify for a full-documentation loan using tax returns and financials, which typically offers better rates, higher borrowing limits and lower deposits than low-doc loans.
What is a low-doc loan?
A low documentation (low-doc) loan is designed for self-employed borrowers who can't easily provide standard documents such as two years of tax returns. They're sometimes used when returns haven't been lodged yet, income is irregular, or the business is newer. According to published industry guides, typical requirements include:
- An ABN registered for at least 12 months (some lenders require up to 24 months; a few specialists accept less with industry experience)
- GST registration (where applicable) for a similar time
- Business Activity Statements for the last 12 months (sometimes 4–6 quarters), lodged with the ATO
- Business bank statements for the last 6 to 12 months
- An accountant's declaration or letter confirming your income, on the accountant's letterhead, signed and dated (often within about 90 days of the application)
- Often an income declaration from you, plus the usual ID, savings and debt documents
In Australia, "no doc" (self-declared income with nothing to back it up) is generally not available through mainstream lenders. After the introduction of responsible lending laws in 2010, ASIC's review of low doc lending found lenders have tightened practices and now commonly obtain business bank statements and letters from accountants to verify income. In other words, the days of a signed statement saying "trust me" are over.
What does the accountant's letter need to say?
Lenders vary, and some use their own form. Generally the letter should include:
- The accountant's full details: name, firm, ABN, address and phone
- That they have prepared your tax returns/financials and for how long they have acted for you
- Your business details, trading history and confirmation of your income for a stated period
- Confirmation that tax returns are lodged and no major ATO debts exist (where relevant)
- A signature and date
- A standard disclaimer to protect the accountant
Not every accountant will sign these, and not every lender accepts every accountant (some need a CPA, CA or Tax Practitioner registration). Ask your accountant early. If an accountant won't sign because the income isn't as high as you'd like, treat that as a useful signal, not an obstacle.
Low-doc vs full-doc: how they compare
- Interest rate: low-doc is typically higher
- Deposit/LVR: low-doc often caps around 80% LVR (some specialists go up to about 85%); full-doc loans can go to 90–95% with LMI or a government scheme
- LMI: may apply at lower LVRs on low-doc loans
- Loan size: sometimes capped on low-doc products
- Lender choice: more lenders and better features on full-doc
- Speed: low-doc can be quick (some lenders approve within a few business days once documents are in)
- Switching later: many low-doc borrowers can refinance to a full-doc loan once they have the paperwork
When a low-doc loan still makes sense
- Your tax returns haven't been lodged or are behind
- Your declared taxable income is much lower than your real cash flow (heavy deductions, retained profits in a company or trust)
- You're changing business structure
- You need to move quickly on a purchase
- You have good BAS and bank statement history but unusual accounts
Checklist: self-employed 3+ years, deciding the pathway
- Do I have two years of lodged personal and business returns and Notices of Assessment? If yes, ask for full-doc options first
- Is my taxable income enough to support the loan I want?
- Do I have ATO debt or a payment plan? (Clear it if possible)
- Do I have 12 months of lodged BAS and clean business bank statements?
- Is my ABN active for 12–24+ months and GST registered where applicable?
- Will my accountant sign a letter or the lender's declaration form?
- Can I put down a bigger deposit (20% or more) if low-doc is needed?
- Have I compared both full-doc and low-doc options through a broker?
- Do I have a plan to refinance to a cheaper loan once I'm full-doc eligible?
A little humour
An accountant's letter is like a character reference: very helpful, usually appreciated, and almost never accepted instead of showing up with your actual paperwork. (Though your accountant's reference may well be nicer than your mum's.)
Official links
- ASIC, review of low doc home lending (REP 410): https://asic.gov.au
- ASIC MoneySmart, home loans: https://moneysmart.gov.au
- ATO, sole traders and business tax: https://www.ato.gov.au
- Business.gov.au, ABN and GST: https://business.gov.au
Disclosure and Disclaimer
This article is general information only and is not financial, credit, legal, tax or investment advice. It does not consider your objectives, financial situation or needs. Low-doc lending policies vary widely by lender and change often. Please do your own research and obtain independent advice from a licensed financial adviser, mortgage broker, accountant and conveyancer or solicitor before making any decision. Loan approvals are subject to lender criteria. To the maximum extent permitted by law, our business, its directors, employees and brokers accept no liability for any loss or damage arising from reliance on this article.