Can company directors get a home loan using retained profits?
Yes. A home loan for company directors can be assessed on your share of company profits, not just the salary and dividends you draw. Retained profits are real income to the right lender, and with Perth listings finally rising and the median chasing $1 million, the timing matters. Here is how it works.
Short answer: yes, and this is one of the most common wins we see. A home loan for company directors does not have to be built on the salary and dividends you happen to draw. With the right lender, it is built on what your company actually earns, including the profits you have deliberately left inside it. That distinction matters more in WA right now than it has in years. Perth listings have just passed 7,000 for the first time in over three years, the median house price is chasing $1 million, and the people often best placed to buy are the ones the standard assessment reads worst. If you run a company and your tax return undersells you, this guide is for you.
Can a company director with retained profits really get a home loan?
Short answer: yes. A home loan for company directors can be assessed on salary plus your share of company net profit, rather than salary plus dividends drawn. On that assessment, profit retained in the company counts towards borrowing power. The lenders that do this are a smaller pool, and finding them is the whole game.
Retained profits are not hidden money. They sit in your company’s accounts, they were earned by your work, and they are documented in financial statements a lender can read. The question is never whether the money is real. It is whether the lender’s assessment method is built to see it.
Ownership and control are the keys that unlock it. A director who owns and controls the company can commonly have the company’s performance assessed as their own capacity, because the profit is theirs to access. A minority shareholder is a different conversation, and there are paths there too.
Why does my tax return show so much less than my company earns?
Short answer: because the tax system is built that way. Company profits are taxed at 25 per cent for most trading companies, while personal rates run much higher. Keeping profit in the company is smart, legal structuring that most directors use. The side effect is a personal tax return that badly undersells your real position.
On the ATO’s current rates, a base rate entity pays 25 per cent company tax, and that rate has applied since 2021-22. The structure rewards leaving profit in the business to fund growth, equipment, staff and a buffer. So that is exactly what well-run companies do.
You are in very large company doing it, too. The ABS counted companies as the fastest-growing business structure in Australia in its latest release: up 4.7 per cent to more than 1.2 million. That is over a million Australians whose real earning power lives in company accounts rather than on a payslip. The lending market is catching up to that reality, unevenly. Which is the opportunity.
How do lenders assess a home loan for company directors?
Short answer: two very different ways. The standard read takes your salary plus the dividends you drew, and ignores the company. The stronger read takes your salary plus your share of the company’s net profit, so retained earnings count. Same director, same financials, two very different borrowing numbers.
Picture the same director assessed twice. She pays herself a modest salary and drew small dividends last year, because the company was funding a new contract. Read one: salary plus dividends, a thin file, a small loan. Read two: salary plus her share of the company’s profit, the real picture, a loan that matches what she actually earns.
Nothing about her changed between those two reads. Only the lender did. That is the entire story of a home loan for company directors. That is why the placement decision for directors is worth more than almost any rate negotiation, and it is the same lender-matching logic we apply to low doc home loans without tax returns and home loans on one year of tax returns.
What are add-backs and how do they lift a director’s borrowing power?
Short answer: add-backs restore expenses that reduced your taxable profit but do not reduce your real capacity: depreciation, one-off costs, interest on debts being refinanced, extra super contributions, and your own director’s wage added back to company profit. They can lift assessable income well above what the bottom line shows.
Common add-backs lenders consider for company directors
| Add-back | Why it can count |
|---|---|
| Depreciation | A paper deduction, not cash leaving the business each month. |
| One-off expenses | Genuine non-recurring costs that will not repeat, evidenced as such. |
| Interest on debts being refinanced | Repayments that stop once the new loan replaces the old one. |
| Extra superannuation | Contributions above the compulsory minimum are discretionary income. |
| Director’s wage | Your own salary is restored to company profit so the whole picture is assessed once. |
| Retained profit | With some lenders, your share of profit left in the company counts directly. |
No add-back is automatic. Each one has to be evidenced, and lender policy on every line differs. An itemised add-back schedule prepared from your financials is the single highest-value document in a director’s application, because it lets the assessor trace every adjustment instead of guessing.
Your tax return was designed to look small. Your borrowing power does not have to be.
Why does this matter for WA company directors right now?
Short answer: because the market just opened a window. Perth listings have passed 7,000 for the first time in more than three years, which means real choice for buyers again. At the same time REIWA has the median house price at $938,000 and tracking towards $1 million. Directors assessed properly can act in that window. Directors assessed on the standard read watch it close.
For three years the Perth story was no stock and rising prices. The stock side has finally shifted: REIWA’s latest quarterly update shows the market rebalancing, with listings up, demand easing and time on market lengthening, even as annual prices keep rising. Windows like this reward the buyer whose finance is ready at full strength, and a properly placed home loan for company directors is exactly that. For a director, full strength means the profit read, not the dividend read.
The same logic runs through your business side. If your company itself needs funding, we covered how the market reads company bank statements in business loans using bank statements. Personal and company lending for a director are two doors into the same file, and we work both.
How do you get a home loan for company directors approved from here?
Short answer: gather two years of company financials and tax returns, build the add-back schedule, confirm your ownership position, then place the application with a lender that assesses your share of company profit. The lender choice is the strategy. Everything else is preparation for it.
- Know your real number. Your capacity is salary plus your share of company profit plus evidenced add-backs, not the figure at the bottom of your personal return.
- Get the documents in order. Company financials, company and personal tax returns, and recent management figures if the current year is stronger.
- Build the add-back schedule. Itemised, evidenced, traceable line by line.
- Confirm the structure story. Ownership percentage, control, and how profit flows. This determines which lenders’ policies fit.
- Place it once, properly. One application to the lender whose policy on a home loan for company directors matches your file beats a string of standard applications that were never built to read you.
From the broker’s desk: directors are the most underestimated borrowers we see. The pattern is always the same: a strong company, a deliberately modest personal income, and a bank assessment that only read the second part. Our job is making the first part count. If you run a company and want to know what your real position supports, reach out. We will look at it properly and tell you where it sits.
About Pilbara Finance
WA-owned, servicing Western Australia and clients Australia-wide.
We compare the options across the panel and give a solid recommendation based on your circumstances.
Sound like your situation?
Twenty minutes on the phone, no paperwork to start. We will tell you what your income looks like to a lender before you go anywhere near one.
Start with a chatThis guide is general information for the Australian market, not advice about your situation. Lender credit policy changes, and what applies to you depends on your circumstances. Pilbara Finance is a credit representative (478535) of Mortgage Specialists Pty Ltd, Australian Credit Licence 387025.