Low Doc With BAS

Why do lenders ask for BAS Statements?

Business Activity Statement (BAS) were introduced in 2000 by the Australian Tax Government as a way for businesses to report their taxation obligations. However BAS did not start being a requirement of lenders until late 2008. Due to the Global Financial Crisis (GFC) Lenders Mortgage Insurers were beginning to make large payouts to lenders on loans which were low doc.

The idea behind using these statements was to allow lenders to verify a client’s income, and decrease the risk of low doc loans. Statements are usually issued quarterly, as such you will note that lenders will require your previous 4 quarter’s BAS, which equates to 12 months of statements.

Each quarter’s turnover will be calculated to produce a gross annual turnover, most lenders look at this turnover using the 40% rule. (eg, if your gross annual turnover is $300,000PA then lenders will consider using a maximum of 40% of this figure, which means your declared income would be $120,000.)

Are handwritten BAS accepted by banks?

Financial Institution’s will unfortunately not accept handwritten Business Activity Statements (BAS). They will usually require Australian Tax Office (ATO) Portal Printouts (an example of this is to the left), or a copy of electronically lodged BAS from your bookkeeper.

BAS Statements are input via the Electronic Lodgement System (ELS) which is located on the ATO website. These Statements are required to be lodged quarterly with the Australian Tax Office.

Some lenders however can approve home loans with an alternative proof of income, such as an Accountants Letter or Income Declaration therefore if you do only have handwritten BAS statements we may still be able to assist you with your home loan.

Example of blank BAS Statement to be completed by hand:

The blank Business Activity Statement will be posted to you by the Australian Tax Office (ATO) at the cycle you choose when you first submit your application to the ATO to register your Australian Business Number (ABN).

Be careful when select your preferred cycle, as this cannot be amended within the first year of your ABN registration.

Example of ATO issued completed Quarterly GST Statement:

This is an example of what a Business Activity Statement (BAS) would look like if you were to use Accounting Software.

When using most Accounting Software products the Tax Portal will sync and upload information automatically for you.

This means that you will not have to double up on your work load and complete the hand written BAS Statements (above).

What are the lenders guidelines?

In addition to 12 months of Business Activity Statement (BAS) lenders will also require the following:

  • Your ABN and GST must be registered for a minimum of 2 years.
  • Your credit history must be clear of any adverse listings and you must be paying your current debts on time.
  • You must be borrowing 80% or less of the property value.
  • If borrowing over 60% of the property value (LVR) you may have to prove Genuine Savings.

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