Why the "2 years" rule exists — and where it bends
Most mainstream lenders default to wanting two years of tax returns because it gives them a track record to average. It's a risk management shortcut, not a hard legal requirement. A meaningful number of lenders have separate policies for businesses trading less than two years, provided certain conditions are met.
The key word is conditions. Getting a self employed home loan under two years isn't automatic, but it's far more achievable than the generic advice suggests.
The real question lenders ask: Not "how long have you been trading" in isolation, but whether your income is stable and verifiable, and whether you have relevant experience in the same field beforehand.
One year of financials — what's typically required
A number of lenders accept one full year of tax returns or financial statements, generally under these conditions:
- Minimum 18-month ABN registration — even though only one year of financials is provided
- Consistent or growing income — a declining trend in the single year on record raises flags
- Lower maximum LVR — typically capped around 80%, meaning a larger deposit is usually needed
- Clean GST and BAS lodgement history — late or missing lodgements weaken the application
Does prior industry experience count?
Often, yes — and this is where many borrowers under-sell their own application. If you worked as an employee in the same trade or profession before starting your own business, that experience can be used to support the loan, particularly if the new business has continued working with similar clients or in the same field.
A tradie who worked for someone else for five years before starting their own ABN has a very different risk profile to someone starting a completely new venture from scratch — even if both only have one year of self employed tax returns.
What weakens an application under 2 years: Inconsistent income between months, a business in a completely different field to any prior employment, or an ABN registered for less than the 18-month minimum most lenders require even for the one-year financials option.
What if I've been trading less than 12 months?
This is the most difficult position to finance. Very few lenders will consider a business with under 12 months of trading history regardless of how strong the income looks, simply because there isn't yet a track record to assess.
In this situation, the more useful path is often to use a co-borrower with stable PAYG income, wait until the 12-month mark is reached, or explore whether a guarantor structure suits the situation. A broker can map out which of these applies before you spend time on an application that's unlikely to proceed.
Should you wait, or apply now?
Waiting feels like the safe option, but it isn't free. Property prices move, rates move, and the property you want today may not be available in twelve months. The better approach is finding out now what's actually possible with your specific business, income pattern, and documentation — rather than assuming the generic two-year rule applies to you.
Under two years self employed doesn't mean no — it means you need the right lender.
Different lenders have genuinely different policies on trading history, prior employment, and income verification. The right match for your situation is rarely the first lender you'd think to ask.
See Self Employed Home Loans →Frequently asked questions
Yes, with some lenders. A one-year tax return policy typically requires a minimum 18-month ABN registration, evidence the business is trading consistently, and is usually capped around 80% LVR.
This is the hardest scenario to finance. Most lenders require at least 12 months of trading history, though some will consider applicants with relevant industry experience prior to becoming self employed.
It can. Some lenders look favourably on applicants who worked in the same industry as an employee before going self employed, treating it as evidence of relevant experience.
Often yes. Lenders willing to consider shorter trading histories frequently cap borrowing at 80% LVR, meaning a 20% deposit is generally required.
Not necessarily. Waiting guarantees nothing and property prices may move in that time. A broker can assess your specific situation now.