Tax season has a quiet side-effect nobody mentions: every notice of assessment and every set of business financials lodged this winter rewrites someone’s borrowing power. Sometimes down — usually, after a decent year, up. If you last checked your capacity in 2025, you’re working off stale numbers.
Self-employed? This is your window
Lenders assess you on your latest financials — and FY2025–26 just became usable. A strong year changes everything: lenders that average two years see the average rise, and one-year-policy lenders can use the new year alone. Add-backs (depreciation, one-off costs, extra super contributions) go on top. The difference between the right and wrong lender here is regularly six figures of capacity.
PAYG? Three things worth rechecking
- The refund. Banked now, it’s seasoned deposit money by spring. Parked in an offset, it’s cutting interest from day one — offset vs redraw.
- The pay rise. A July increase plus two new payslips can move your capacity meaningfully — pre-approvals don’t update themselves.
- The debts you cleared. Paid out a car loan or cut a card limit this year? Your servicing calculation improves the day the lender sees it.
Investors: one eye on 2027
From 1 July 2027, rental losses on established properties bought after 12 May 2026 stop offsetting wages. If your plans involve buying this financial year, the new rules — and the tax calculator’s before/after view — belong in the conversation with your accountant.
Common questions
I'm self-employed — which years do lenders count?
Commonly the latest one or two years of tax returns and financials. Some lenders use only the most recent year; others average two. If FY2025–26 was your best year yet, the right lender choice can turn that directly into borrowing power — that's a policy-matching exercise, not luck.
Will a big deduction year hurt my application?
On paper, yes — lenders start from taxable income. Some deductions get added back (depreciation, one-off equipment, extra super), but aggressive write-offs can cost you borrowing capacity for two years. If a purchase is on the horizon, it's worth a conversation before your accountant lodges next year's return.
Does my tax refund count toward a deposit?
Generally yes once it lands in your account — for genuine-savings purposes some lenders like to see funds held for three months, so a refund banked now is well-seasoned by spring auctions and summer settlements.
My income went up this year. Does pre-approval update automatically?
No — a pre-approval is based on the documents you supplied. New payslips, a new notice of assessment or new financials mean it's worth re-running the numbers; the difference can be tens of thousands in capacity.
General information only — not tax advice; deduction and lodgement decisions belong with your accountant. Current at 18 August 2026.
