Buying Your First Home When You Run a Small Business

Self-employed small business owners absolutely can buy their first home in Australia. The process is similar to any other first-home buyer, but lenders scrutinise your income, tax returns and business debts more closely and apply at least a 3% serviceability buffer to your rate. You’re usually still eligible for the First Home Owner Grant, state stamp duty concessions and the federal Home Guarantee Scheme if you meet the normal criteria. This guide shows you how to line up your business and personal finances so you can act this week.

Small business owners need clear, up-to-date financials before applying for a first home loan.

1. What actually changes when you’re a self-employed first-home buyer?

1.1 How lenders see a small business owner

On paper, you’re two things at once: an individual buying a home, and the person responsible for a business. Lenders have to make sure both can survive if interest rates rise or your revenue dips.

They’ll typically look at:

• Legal structure – sole trader, partnership, company or trust.
• Time in business – many mainstream lenders want at least two years; some will consider one strong year with the right story.
• Taxable income – they work off your tax returns and financial statements, not the top-line revenue you invoice.
• Business debts and guarantees – most lenders treat facilities with personal guarantees as personal commitments when assessing your home loan.

If your business is growing and your income is well documented, being self-employed is not a disadvantage. The challenge is when your books are messy, your income is volatile or you’ve been aggressively minimising tax.

1.2 The tax trade-off: borrowing power vs deductions

A big friction point for small business first-home buyers is the way taxable income is calculated.

• The more you claim in deductions, the lower your taxable profit.
• Lenders generally assess borrowing power from taxable profit plus selected add-backs (e.g. non-cash depreciation), not from your gross revenue.

Worked example (illustrative):

• Business revenue: $220,000.
• Scenario A – heavy deductions, taxable income $100,000.
• Scenario B – more conservative deductions, taxable income $150,000.

With the same other commitments, Scenario B can often borrow $150,000–$250,000 more than Scenario A, simply because of the higher taxable income. That’s why a tax strategy aimed solely at minimising tax can quietly kill your borrowing power.

1.3 Serviceability and buffers when income is variable

All Australian lenders must test your borrowing capacity with a buffer. APRA’s current guidance is at least 3 percentage points above the actual rate.

If your actual interest rate is 6.2% p.a., the lender assesses you at 9.2% p.a. over the loan term.

On a $700,000, 30‑year principal & interest loan at 6.2%:

• Approximate monthly repayment: ~$4,300.
• At 9.2% (for serviceability), the assessed repayment jumps to roughly $5,780.

For small business owners, that test sits on top of the natural ups and downs of your revenue. A conservative approach is to stress-test your own numbers assuming both a 30–50% drop in revenue and a 2–3% rate rise to decide what you’re truly comfortable borrowing.

2. Grants and schemes: what small business first-home buyers can use

There is no special “small business only” first-home grant in Australia. But if you’re self-employed and meet the usual criteria, you can tap into the same schemes as salary earners.

2.1 First Home Owner Grant (FHOG)

The FHOG is a state/territory-based payment, generally for new homes only. Rules change, so you must check your state revenue office, but in broad terms:

• You (and your partner) must be first-home buyers.
• You must be an individual, not a company or trust.
• You must live in the property as your home for a minimum period.
• Being self-employed does not affect eligibility.

The FHOG doesn’t look at how you earn income – only whether this is your first home and the property meets price and type rules.

2.2 Home Guarantee Scheme (First Home Guarantee and others)

The federal Home Guarantee Scheme (HGS), administered by Housing Australia, includes:

• First Home Guarantee (FHBG) – often called the First Home Guarantee.
• Regional First Home Buyer Guarantee.
• Family Home Guarantee (for single parents/guardians).

These guarantees let eligible buyers purchase with as little as 5% deposit (or 2% for Family Home Guarantee) without paying Lenders Mortgage Insurance (LMI). For small business owners, the key points are:

• Employment type (PAYG vs self-employed) is not a barrier.
• You must meet income caps, property price caps and residency rules.
• You must be able to service the loan under normal lender rules.

Used well, the FHBG can bring forward your purchase by years because you don’t have to wait to save a 20% deposit while also funding your business.

2.3 Stamp duty concessions and other help

Most states and territories offer some combination of:

• Stamp duty exemptions or concessions for first-home buyers.
• Discounted transfer duty thresholds for new or existing homes.
• Shared equity schemes in some jurisdictions.

Again, these don’t care whether you’re a small business owner. They care about being a first-home buyer, property price and occupancy.

Here’s how the main options line up at a high level (rules vary by state and over time):

If you’re buying in Sydney specifically, it’s worth pairing this with a location-focused plan like the ones in /insights/navigating-sydney-first-home-buyer-market-2026 and /insights/sydney-first-home-buyer-market-2026.

Self-employed first-home buyers can access the same grants and government schemes as PAYG workers.