Can I get a home loan while on an ATO payment plan?

What lenders will want to see

• The ATO may report a business tax debt to credit reporting bureaus only when set criteria are met, including the size and age of the debt and the business not effectively engaging with the ATO, for example through a payment plan. [ATO]
• The ATO gives written notice before it discloses, and says the information is removed once the debt is paid or the business engages. [ATO]
• General interest charge keeps accruing while a payment plan is in place, and you must keep lodging and paying new amounts on time or the plan can be cancelled. [ATO]
• Lenders must make reasonable inquiries about your financial situation and take reasonable steps to verify it before lending. [ASIC]

Your options, including not borrowing

• Keep paying the plan and apply later, once the debt is cleared or smaller. Not borrowing now is a valid choice.
• Apply now, with full disclosure, to a lender whose current policy accepts an ATO payment plan. Policies vary by lender and change; we check current policy for your situation.
• Ask the ATO about a different arrangement if the plan repayments are too high. [ATO]
• Get advice on the tax debt itself from your accountant or tax agent.

Risks to weigh

Next steps

1. 1Download your ATO statement of account and the payment plan terms.
2. 2Gather your latest lodged tax returns, recent BAS and business bank statements.
3. 3Talk to a broker before applying, so only one well-matched application is made.