Using Company, Trust or Partnership Income for an Off‑the‑Plan Loan

Buying off‑the‑plan when your income runs through a company, trust or partnership is absolutely possible — but it’s a different game to a PAYG borrower.

Lenders will use your entity income to support the loan only when it looks stable, recurring and well‑documented over time. With off‑the‑plan, they also care about what your income will look like just before settlement, not just today. That means planning your tax, cashflow and entity structure now so you’re still bank‑ready in 18–36 months.

This guide breaks down how company, trust and partnership income is assessed for off‑the‑plan loans, what documents you’ll need, and the steps to take this week to protect your approval and your business.

Company, trust and partnership income can all support an off-the-plan loan when documented well.

1. The core challenge: off‑the‑plan + business income

Why off‑the‑plan is tougher when you’re self‑employed or use entities

With a typical purchase, your loan is fully assessed right before you settle. With off‑the‑plan, you commit today but your income, business and the lending environment can all change before the bank finally says yes.

Key moving parts:

1. Assessment happens near settlement — not at contract exchange.
2. APRA’s buffer means banks test your loan at ~3% above the actual rate (APRA guidance). If rates are 6%, your servicing is tested around 9%.
3. Self‑employed / entity income is volatile — lenders shade it and usually want two years of tax returns.
4. Your accountant may be minimising taxable income, which can slash borrowing power just when you need it.

If your income dips or your tax planning gets too aggressive before the final assessment, you can end up in the situation described in [/insights/income-drops-before-off-the-plan-loan-assessed] — committed to a contract but struggling to get the loan across the line.

Quick rule‑of‑thumb answer

• Yes, you can use company, trust or partnership income for an off‑the‑plan loan.
• Lenders will look at business profits, your share of those profits, and actual distributions/drawings.
• They typically average two years, sometimes three, and apply shading (often 20–30%) to allow for volatility.
• The same income needs to look strong again at final assessment, not just in the year you sign.

The practical implication: you need a multi‑year plan for your financials, not just a good year today.

2. How lenders look at different entity types

2.1 Using company income for an off‑the‑plan loan

If you trade through a company (Pty Ltd), lenders usually:

• Start with net profit before tax.
• Add back: non‑cash expenses (depreciation), interest (if they’re refinancing), some one‑offs.
• Adjust for your salary or directors’ fees paid from the company.
• Look at retained earnings trends over at least two years.

Common treatment for your usable income:

• Your wage/salary from the company; plus
• Your proportionate share of net profit (after adjustments), especially if you’re a major shareholder/director.

Many lenders will only count retained profits if you own a large share (e.g. 50%+), have control and the business isn’t capital‑hungry.

Worked example – company income

• Company net profit before tax (Year 1): $280,000
• Company net profit before tax (Year 2): $320,000
• Director’s wage to you: $120,000 p.a.
• You own 100% of the shares.

A lender might:

1. Average profits: ($280k + $320k) ÷ 2 = $300k
2. Shade profits by 20%: $300k × 80% = $240k
3. Treat your income as:
   • $120k wage
   • Plus some or all of the $240k adjusted profit

Indicative servicing income they might use: $250k–$300k p.a. depending on their policy and how capital‑intensive the business is.

2.2 Using trust income for an off‑the‑plan loan

Trusts can be powerful but messy from a lender’s perspective.

Common trust types:

• Discretionary (family) trust
• Unit trust
• Hybrid trust

Lenders usually:

• Assess the trust’s financials (profit and loss, balance sheet).
• Look at distributions to you over two years.
• Consider your control (trustee/director of trustee, appointor, unit holdings).

You personally might be able to count:

• Distributions actually paid to you, shown in your tax returns.
• Possibly a share of retained profits if you control the trust and can access the funds.

If you’re already using trust distributions or investment income today, it’s worth revisiting [/insights/investment-income-trust-distributions-mortgage-australia] — the same principles of stability and documentation apply, with the added timing risk of off‑the‑plan.

2.3 Using partnership income for an off‑the‑plan loan

For professional practices and small businesses run as partnerships, lenders typically:

• Obtain full partnership tax returns.
• Confirm your partnership share (e.g. 40%).
• Use your share of net profit (after appropriate addbacks) as income.

They will pay close attention to:

• Whether profits are retained in the partnership or actually drawn.
• Partner exit risks — is your income dependent on a short‑term arrangement or fixed‑term contract?

Comparison: company vs trust vs partnership income