Tax returns are the gold standard for lenders — but they're also the document most likely to work against you if you're self-employed. Two years of legitimately lodged BAS statements can bypass the tax-return problem entirely. This guide explains which lenders accept them, how income is calculated, and what else you need to make it work.
Why BAS Statements Work as Income Evidence
BAS (Business Activity Statements) are lodged with the ATO every quarter or month. They show your gross GST-inclusive turnover — not your taxable income after deductions. That's the key difference.
If you've claimed significant deductions (depreciation, vehicle, home office, super), your tax return might show $80,000 income while your BAS shows $280,000 in turnover. A lender working from BAS can see the real activity level and apply their own income formula — which is often significantly more generous than using your declared taxable income.
Important distinction
BAS-based loans don't use your full BAS turnover as income. They apply a "gross income multiplier" — typically 50–60% of BAS turnover — as a proxy for net income. This is still often far higher than what your tax return shows.
Which Lenders Accept 2 Years BAS Only
Not every lender offers BAS-only low doc. The big four banks require full financials. The lenders below have established BAS-assessment programs:
| Lender | BAS Doc Type | Max LVR | Income Formula |
|---|---|---|---|
| Pepper Money | 2 yrs BAS (lodged) | 80% | ~50% of avg quarterly GST turnover × 4 |
| Liberty Financial | 2 yrs BAS + accountant letter | 80% | Accountant-declared income, BAS as support |
| La Trobe Financial | 2 yrs BAS (or bank statements) | 75–80% | Case by case — assessor review |
| Resimac | 2 yrs BAS + 6 months bank statements | 80% | Bank statement average cross-checked against BAS |
| Bluestone | 2 yrs BAS | 75% | Gross BAS income × lender multiplier |
| Firstmac | 2 yrs BAS + accountant declaration | 80% | Declared income (BAS as verification) |
Rates and policies current as at April 2026. Verify current policy with lender or broker before applying.
How Income Is Calculated From BAS
Lenders don't just take your BAS turnover and use it as income. They apply a formula. The most common approaches:
Method 1: GST Turnover Multiplier
Add up total G1 (total sales) from 8 quarters of BAS. Divide by 8 to get average quarterly turnover. Multiply by 4 for annualised figure. Apply lender's net income factor (typically 40–55%).
Example: $280K annual turnover × 50% = $140K assessed income
Method 2: Accountant Declaration + BAS Verification
Your accountant writes a letter declaring your net income (e.g. $120,000). The BAS is used to verify the turnover level is plausible. The declared figure is used — not a formula.
Better result when accountant-declared income exceeds the multiplier formula
Method 3: Bank Statement Cross-Check
Some lenders require 6–12 months of business bank statements alongside BAS. They compare deposits against BAS to ensure consistency. Income is calculated from bank statement averages.
Useful when BAS understates actual cash received (e.g. timing differences)
The Core Document Requirements
A BAS-based low doc application will typically require:
- 8 consecutive quarterly BAS (2 full financial years), or 24 monthly BAS — must be ATO-lodged, not just prepared
- GST registration confirmation — must be GST-registered (turnover over $75K threshold)
- ABN active for 2+ years — your ABN must be at least 24 months old at time of application
- Accountant declaration letter (required by most lenders) — confirming business is trading and income level
- 6 months business bank statements (required by some lenders for cross-check)
- 3 months personal bank statements
- Property evidence — signed contract of sale or recent valuation
BAS must be lodged — not just prepared
This is the #1 cause of low doc declines. Your BAS must be formally lodged with the ATO and show lodgement dates. A BAS that was prepared by your accountant but not yet lodged is not accepted. Check your ATO online services to confirm all periods are lodged.
What Happens If BAS Shows Inconsistent Income
Lenders want to see stable or growing turnover across the 8 quarters. There are acceptable patterns and red flag patterns:
| BAS Pattern | Lender View | What It Means for You |
|---|---|---|
| Steady or growing turnover YoY | Strong | Full assessed income used; most lenders accessible |
| Seasonal variation (e.g. construction peaks) | Acceptable | Annual average used; assessor notes industry cycle |
| Year 2 significantly higher than Year 1 | Acceptable | Most lenders use 2-year average; some allow Year 2 only |
| Year 2 significantly lower than Year 1 | Concern | Lender may use lower year or average; add explanation letter |
| One quarter $0 or missing | Problem | Gap in sequence breaks the 8-quarter continuity requirement |
| New activity level in last 2 quarters | Assessed case-by-case | May need to wait for 2 full years at new activity level |
LVR Limits and LMI on BAS Low Doc Loans
BAS low doc loans have stricter LVR limits than standard loans:
- Standard LVR cap: 80% — available at most BAS lenders without LMI (for strong applications)
- Up to 85% possible — at select specialist lenders, with LMI premium at low doc rates (higher than standard)
- Below 80%: cheaper rates — interest rates on low doc loans are higher; a lower LVR can improve your rate tier
LMI on a low doc loan is significantly more expensive than on a standard loan at the same LVR. For a $700,000 purchase at 85% LVR on low doc, LMI could be $25,000–$35,000. Build this into your deposit calculation.
When BAS-Only Isn't Enough (and What to Add)
Some situations call for a hybrid approach — BAS as the primary document, supplemented by supporting evidence:
- If turnover is inconsistent: Add a signed accountant letter explaining seasonality or one-off quarter dips
- If the BAS multiplier undersells you: Add an accountant income declaration (Method 2) — some lenders will use the higher of the two
- If your business structure is complex: Add latest management accounts or 12-month P&L to give the assessor context
- If you have a company: Add the ASIC company extract and most recent company bank statements
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Lender Strategy: Getting the Best BAS Assessment
Once you understand how BAS income is calculated, you can influence the result. Here's what experienced brokers do to maximise assessed income and minimise rate:
Strategy 1: Time Your Application to End of Q2 or Q4
Lenders look back 8 quarters. If your income has been growing, applying at the end of a strong quarter means that strong quarter is included rather than an older weaker one. Timing the application 4–6 weeks after your best recent BAS quarter maximises the trailing average.
Strategy 2: Use Accountant Declaration Where BAS Formula Undersells
If your actual take-home is higher than the BAS multiplier suggests — for example, your expenses are low relative to turnover — get your accountant to declare your income in a signed letter. Liberty, Firstmac, and some Resimac products use declared income with BAS as supporting evidence. This can add $30,000–$50,000 to assessed income.
Strategy 3: Match Lender to Your Deposit Size
At 80% LVR (20% deposit), you access the most competitive BAS low doc products. At 85% LVR you're paying LMI at elevated low doc rates — factor $20,000–$35,000 into your planning. If you're borderline on deposit, consider using a guarantor or a Family Home Guarantee to access a full doc product instead.
Strategy 4: Clean Up Business Account Timing
For lenders that cross-check BAS against bank statements: make sure your business account deposits are clean for the 6 months before application. Large round-number transfers from savings to business (that look like injections rather than income) or erratic deposit patterns raise questions. Run income through the business account cleanly in the months before applying.
Strategy 5: Don't Apply to Big 4 Banks
CBA, ANZ, Westpac, and NAB do not offer BAS-only low doc. Applying to them with BAS-only documentation will result in a decline — and that decline goes on your credit file. Only approach specialist and non-bank lenders for BAS-based applications. A broker channels your application to the right lender the first time.
Transitioning to Full Doc After 2 Years
A low doc loan is not a permanent arrangement. Most borrowers transition to a full doc loan after 1–3 years, typically at refinance, with two goals:
- Lower rate: Full doc rates are typically 0.5–1.5% lower than low doc rates. On a $700K loan that's $3,500–$10,500 per year in interest savings.
- Better LVR: With equity growth and a full doc refinance, you may reach 80% LVR and eliminate any ongoing low doc premium.
Plan your low doc loan as a 2–3 year bridge, not a permanent home. Once your tax returns catch up with your real income, refinance immediately.