Your Accountant is About to Restructure Your Business. Tell Your Broker First.

Your Accountant is About to Restructure Your Business. Tell Your Broker First.

There is a conversation that happens in accountants' offices every week, usually around tax time, and it almost always makes sense. You have outgrown operating as a sole trader. A company or a trust would give you better asset protection, cleaner separation between you and the business, and a more sensible tax position. The paperwork gets lodged, the new entity is set up, and you get on with running the business.

Six months later you apply for a home loan and find out your lender thinks you have been in business for six months.

Nothing dishonest has happened. You did not do anything wrong, and neither did your accountant. The two professionals were solving two different problems and nobody put them in the same room. This is one of the more expensive avoidable mistakes a self-employed borrower can make, and it is almost entirely a question of timing.

Why does changing your business structure affect your home loan?

Because most lenders read your trading history off the entity, and a new structure is usually a new entity.

Your Australian Business Number attaches to the entity, not to the business name or to you personally. The Australian Business Register is explicit that if you change your business structure you may need to cancel your existing ABN and apply for a new one, and it names moving from sole trader to company, and from sole trader to partnership, as examples where that is required.

When a new ABN is issued, its registration date starts from the day it was issued. Many lenders use the ABN registration date as a proxy for how long you have been trading. Your clients are the same, your work is the same, your bank account may even be the same, but the trading history the lender can see starts over.

It is worth being precise about something here. There is no regulation that says a restructure resets your lending clock. No prudential standard and no piece of credit legislation addresses it. This is individual lender credit policy, which means it varies between lenders and it can change. That is also the reason it is worth asking before you act rather than assuming.

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Does a new structure really mean a new ABN?

Sometimes, not always, and the distinction matters.

Changing the entity generally means a new ABN. Sole trader to company, sole trader to partnership, partnership to company: these create a different legal person, and the ABN follows the legal person.

Changing what you do without changing the entity generally does not. The Australian Taxation Office says that if you close one sole trader business and start another as a sole trader, you do not need to cancel your ABN. You do need to tell the ATO when your business type or industry classification changes.

So a tradesperson who moves from residential work to commercial work keeps their ABN. The same tradesperson who incorporates does not. That is the line, and it is the line a lender's system is looking at.

What changed for trusts and companies through 2026?

Several major lenders tightened their appetite for lending to trusts and companies, and it happened quickly.

From late 2025 into early 2026, one major lender withdrew from lending to trusts and companies altogether. Another restricted it to borrowers who were already established customers. A third kept lending but added conditions, including requirements around directorship, a minimum ownership stake, a personal guarantee and an existing relationship with the lender, along with a cap on how much could be borrowed against the property value. One of those lenders publicly linked the change to concerns about structures being used to work around serviceability assessment.

The practical consequence for an ordinary business owner, who is not doing anything of the sort, is that the pool of lenders comfortable with your structure is smaller than it was two years ago. That is not a reason to avoid restructuring. It is a reason to know where you will land before you do it.

Lender appetite in this area is moving. Anything you read about it, including this page, needs a currency check before you rely on it.

How do lenders look at income from a company or a trust?

Differently from how they look at a sole trader, and differently from each other.

The regulator's guidance for banks says that self-employed borrowers are generally more difficult to assess, because their income tends to be less certain. It points lenders toward a combination of evidence: income tax returns, notices of assessment, business activity statements, bank statements that confirm income, and written confirmation from an accountant. That gives you a useful shopping list of what to have ready, and it applies whatever your structure.

Beyond that, the treatment diverges. Profit retained inside a company may or may not be counted as your income. Trust distributions are assessed differently again, and some lenders want to see the trust deed and full trust financials before they will look at your application. If the business pays you a wage, some lenders will consider that wage, but a salary paid by a business you own is not automatically treated the same way as a salary from an unrelated employer. Ownership, trading history, consistency and the sustainability of the payment all come into it.

We covered how lenders arrive at an income figure in more detail in our guide to self-employed home loans in Melbourne. The short version is that your structure decides which of those methods are even on the table.

When is the right time to restructure?

Either well before you borrow, or after you have settled. The expensive window is the one in between.

If buying or refinancing is on your horizon in the next year or two, the sequence is worth planning deliberately. That might mean restructuring now and accepting a wait while the new entity builds a history. It might mean borrowing first and restructuring after settlement. It might mean restructuring now and applying through a lender whose policy can accommodate a shorter trading period, subject to assessment.

What it should not mean is finding out the order was wrong after the fact. The conversation costs nothing. The mistake costs a year.

Bring your broker and your accountant into the same conversation before the new entity is registered, not after. Your accountant is optimising your tax and protecting your assets, both of which are legitimate and important. They are not usually assessing the effect on your borrowing position, and most would tell you that themselves.

What if you have already restructured?

It is not fatal, and you have more to work with than you might think.

Lenders differ on how much weight they give to continuity. Evidence that the underlying business carried on through the change can matter: the same industry, the same customers, the same premises, the same person as director, prior-year financials from the old entity, and a clear explanation from your accountant of what changed and why. Some lenders can consider a shorter trading period under the new entity where their policy conditions are met.

The worst approach is to apply somewhere, get knocked back, and apply somewhere else. Each application can leave a credit enquiry, and a pattern of enquiries is itself something an assessor will ask about. Work out which lenders can accommodate your situation before anything is lodged.

Frequently asked questions

Does changing from sole trader to a company reset my lending clock?

Often, in practice, because a new entity usually means a new ABN and many lenders read trading history from the ABN registration date. It is lender policy rather than a rule, so it varies, and some lenders can consider a shorter period under the new structure where their conditions are met.

Can a lender use the wage my own company pays me?

Some can. A wage paid by a business you own is not automatically assessed the same way as a wage from an unrelated employer. Ownership, how long the business has traded, how consistent the payments are and what supporting documents exist all affect it.

Can profit left in my company count toward my borrowing capacity?

With some lenders, yes. With others, no. This is one of the clearest points of difference between lender policies and one of the main reasons it pays to check before applying rather than after.

I moved from a salaried job to an ABN doing the same work. Can I use my old payslips?

Generally not as current income, because the lender is assessing what you earn now rather than what you used to earn. Your history in the same field can still be relevant context, and some lenders treat a borrower with a long track record in their industry differently from a genuine startup.

How long does my ABN need to be registered before I can apply?

It depends on the lender and on your documentation. Requirements differ, and some lenders will consider a shorter period where their policy conditions are met and the income can be evidenced. There is no single answer that applies across the market.

Should I delay restructuring until after I buy?

Possibly, but it depends on why you are restructuring. Asset protection and tax reasons can be urgent in their own right. The point is not that one order is always correct, it is that the decision should be made knowingly rather than discovered later.

How this guide was checked

Statements about ABN registration and business structure come from the Australian Business Register and the Australian Taxation Office. Statements about how lenders verify self-employed income reflect the regulator's published guidance for banks on residential mortgage lending. Statements about individual lender appetite for trusts and companies are described in general terms and were current at the time of writing.

Everything in this article about how a particular lender assesses an application is general and indicative. Credit policy is set by each lender, is not standardised across the market, and changes without notice.

Planning a restructure, or already through one?

If you are self-employed and buying or refinancing within the next couple of years, the order you do things in matters as much as the numbers. We work with business owners whose structures are more complicated than a payslip, and the most useful conversation is usually the one that happens before the paperwork is lodged.

Book a free 15 minute strategy call or complete the Finance Square free 2-minute quiz before you sign anything unconditional, and we will map what your current structure supports, what a change would do to your position, and the order that keeps both goals intact.

Priya Dey is the founder of Finance Square Group, a Melbourne mortgage broking firm specialising in self-employed borrowers, investors and business owners.

This article is general information only. It does not take your objectives, financial situation or needs into account, and it is not credit, financial, tax or legal advice. Obtain independent tax and legal advice before changing your business structure. Lender policies referenced on this page are general and were current as at October 2026. They are set by individual lenders, are not standardised across the market, are subject to change without notice, and every application is assessed on its own circumstances. Nothing on this page is a guarantee of approval. Individual circumstances differ and outcomes are not guaranteed.

Finance Square Group is a trading name of Sioux Property Solutions Group Pty Ltd, Credit Representative 543438, authorised under BLSSA Pty Ltd, Australian Credit Licence 391237.