- Lawyers
- Updated
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Partnership Income Home Loans
Partnership income is the share of profit received by partners in a law firm, accounting practice or other professional partnership. Lenders assess it differently to PAYG income, which can affect how much you can borrow.
Quick Answer
Partnership income can be used for home loan assessment, but lenders typically require two years of tax returns, partnership financials and evidence of the income being ongoing. Assessment varies by lender.
How Lenders Assess Partnership Income
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Two years of personal tax returns
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Frequently Asked Questions
Is partnership income treated like self-employed income?
It can be. Some lenders assess partners similarly to self-employed borrowers, requiring full financials.
Do I need two years of partnership history?
Most lenders prefer two years. Some may consider shorter history with strong supporting documentation.
Personal vs Business Income For Practice Owners
PAYG income comes from an employer relationship and is straightforward to document. Partnership income comes from a share of business profits — which varies year to year, is reported differently in tax returns and requires business financials to verify.
What Lenders May Look At
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2 years of personal tax returns showing partnership distributions
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Partnership financial statements — profit and loss, balance sheet
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Partnership agreement confirming share percentage
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Consistency of distributions across assessment years
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What Lenders Average Across Years
Most lenders average the last two years of partnership income. If year one was $200,000 and year two was $300,000, many lenders will use $250,000. Some lenders use the lower year conservatively. This means a lawyer with growing partnership income may be assessed at below-current levels.
Large Law Firm Partners vs Small Firm Partners
Partners at large firms with stable distributions and consistent profit shares tend to get more favourable treatment from lenders. Partners at smaller or newer firms may face more scrutiny — lenders need to assess whether the firm is profitable and the distributions are sustainable.
Common Mistakes Partners Make
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Not having partnership financials ready before applying
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Assuming PAYG income and partnership drawings are treated the same way
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Not confirming the partnership structure with a tax agent letter
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Applying to a lender without experience assessing partnership structures
Is partnership income treated like self-employed income?
Often yes. Lenders typically require business financials similar to self-employed documentation.
What if one year was unusually high?
Lenders average — a single high year may not fully count if the other year was lower.
Review Partnership Income Options
We identify lenders suited to partnership income structures.
General information only. Lending eligibility, LMI waiver policies, rates and approval outcomes vary by lender and are subject to assessment.
Review Partnership Income Options
We identify lenders suited to partnership income structures.
General information only. Lending outcomes vary by lender and individual circumstances.