Most lenders want 2 years. Not all of them require it.
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.
Not "how long have you been trading" in isolation — but whether your income is stable and verifiable, and whether you have relevant prior experience in the same field.
What's typically required for a 1-year application
A number of lenders accept one full year of tax returns or financial statements, generally under these conditions:
Even when only one year of financials is provided, most lenders require the ABN to have been registered for at least 18 months.
A declining trend in the single year on record raises flags. Lenders want to see the business is growing, not contracting.
Typically capped around 80%, meaning a larger deposit is usually needed — 20% or more.
Late or missing lodgements weaken the application significantly. Up-to-date BAS is important.
Does previous experience in the same field 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.
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.
Two years of trading doesn't automatically mean approval — lender appetite, rates, and property prices all shift in the meantime.
With an 18-month ABN, one year of consistent returns, and prior industry experience, you may already meet one-year policies.
A free 15-minute assessment tells you exactly where you stand — and what to do if you're not ready yet.