Your accountant does their job well, so your tax return shows the smallest defensible profit. Then you apply for a home loan and the bank lends against that number. Add-backs are how some of the gap gets closed — and nobody applies them for you.
What an add-back is
An add-back is an expense the tax return deducted that either did not actually cost you cash, or will not happen again. Lenders will add those amounts back onto the declared profit to work out what you can genuinely service.
The logic is simple: if $18,000 of depreciation reduced your taxable profit but no money left your bank account, that $18,000 is still available to pay a mortgage.
The ones lenders commonly allow
- Depreciation. The biggest one for most trades and any business with equipment or vehicles. A paper deduction, not a cash outflow.
- Additional superannuation. Contributions above the compulsory minimum are usually treated as discretionary, so they get added back.
- One-off expenses. A genuine non-recurring cost — a legal dispute, a major repair, setting up premises — provided you can show it was one-off.
- Interest on debt being refinanced. If the loan generating that interest is being paid out as part of the transaction, the interest disappears with it.
- Directors’ fees and wages paid to yourself. Money that went from your company to you is still your income; it just travelled.
- Net profit retained in the company. Where you own the company, some lenders count profit left in the business, not only what you drew out.
Which of these a particular lender accepts, and on what evidence, varies — that variation is precisely why lender selection matters so much for self-employed borrowers.
What does not get added back
Being straight about the limits, because optimism here wastes everyone’s time:
- Ordinary running costs. Rent, wages to staff, materials, insurance — real money, really spent.
- Your vehicle, if the business genuinely needs it. You cannot add back the ute the business runs on.
- Personal expenses run through the business. Lenders look for these and finding them makes the whole file harder, not easier.
- Anything you cannot evidence from the financials.
How much difference it makes
For a trade or a small business with vehicles and equipment, depreciation plus extra super routinely adds tens of thousands to assessable income. On a declared profit of $70,000, add-backs taking it to $95,000 is an ordinary outcome, not an unusual one — and that gap is often the difference between the loan you need and a decline.
It is worth saying clearly: this is not a trick and it is not aggressive. It is the assessment working as intended. The only failure mode is nobody doing it.
How to actually get them counted
- Lodge your return and get the Notice of Assessment. Nothing happens before this.
- Ask your accountant for the add-backs specifically. They know where each one sits in the financials. The phrase to use is: “which of these deductions are non-cash or one-off?”
- Have the evidence ready. The depreciation schedule, the super contribution records, documentation for anything you are claiming as one-off.
- Make sure the lender is one that allows them. There is no point assembling a strong add-back case and sending it somewhere that only reads the bottom line.
If your return still does not reflect reality
Add-backs close part of the gap, not always all of it. Where the figures genuinely lag the current business — you have grown sharply, or the last return is not lodged — alt-doc lending assesses income from BAS or business banking instead. Higher rate, lower maximum LVR, and usually best treated as a bridge back to standard pricing once the returns catch up.
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General information only — it does not take your objectives, financial situation or needs into account, and is not credit assistance or taxation advice. Which add-backs apply depends on the lender’s current policy, your structure and your financials. Figures are illustrative. Easy Loan Finance is a Credit Representative (CRN 568863) of Beagle Finance Pty Ltd, Australian Credit Licence 383640.
