Is It Necessary to Have an ITR for Home Loan?

Is It Necessary To Have An ITR For Home Loan

So, you plan to get a home loan in Australia to buy your dream home. But while gathering information for a home loan application, you came to know about ITR (Income Tax Returns).

And your question is, “Is It Necessary to Have an ITR for Home Loan?”

To get a home loan in Australia, you need proof of income tax returns; otherwise, your loan application may be rejected. Your presence here indicates that you have one of the most crucial documents for a loan application: ITR. Do you know how to file income tax returns?

Please read our blog until the end to determine how to file income tax returns in Australia so you can get a home loan without much hassle.

What is ITR?

ITR (aka income tax return) is a form that is supposed to be submitted by individuals and businesses whose income exceeds the threshold limit. However, according to experts, if your income is below the threshold limit, you can also file ITR. ITR generally contains information regarding a person’s income earned through business, interest, property sale, house property, etc.

Why is ITR Necessary for a Home Loan in Australia?

When you apply for a home loan in Australia, lenders ask you for income tax returns for a variety of reasons; some are as follows: –

  • To determine your financial capability, the lender asks you for the ITR of the last three years. It helps the lender ensure that your income is stable and that you can pay your EMIs on time.
  • ITR also helps the lender know your credibility and capacity to repay your home loan. If you defaulted on your ITR filing, the lender may assume that you would also default on your EMIs of home loan.

The main reason for asking for an ITR for a home loan in Australia is to determine whether or not you can repay your home loan through EMIs in a timely manner. So, if you plan to apply for a home loan, ensure to file your ITR accurately and promptly to get a home loan hassle-free.

Steps to File Income Tax Returns

Filing your income tax returns for the first time could be daunting. However, you can follow the below process and file your ITR easily and quickly in Australia: –

  • Before you initiate the process of filing an ITR, ensure whether you are eligible for ITR.
  • If you are eligible for ITR, determine the accurate income you need to declare; for instance, students do not need to declare foreign income on their tax return; they are required to declare only the income they earn in Australia.
  • Gather the documents required for income tax returns, which may include your passport, Tax File Number (TIN), expenses receipts, and payslips.
  • Once you have all the required documents in hand, you can file your ITR through MyTax. You can also get extra help from the forms and instructions provided by the Australian Taxation Office.

File Your Income Tax Returns with KPG Taxation

If you have no clue about how to file your income tax returns in Australia as an individual or business and need professional assistance, KPG Taxation can always provide you with the best solution. We are one of the most reliable taxation firms, having been in the same business for a long tenure. You can trust our professionals for the following taxation services: –

  • Income Tax Returns
  • BAS/GST lodgement
  • Bookkeeping
  • Payroll
  •  And many more

Final Verdict

While applying for a home loan in Australia, you may need to produce ITR as proof of income. Otherwise, your application may not be approved. ITR helps lenders determine your credibility and capacity to repay your home loan. However, filing ITR for the first time could be daunting, and if you have no clue about how to file an ITR in Australia, give this blog a read now.

If you need professional assistance filing your income tax returns in Australia, you can contact KPG Taxation; we are always ready to help our beloved clients!

Consulting with KPG Taxation

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  • Income Tax : File your taxes & get the best claims & returns.
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  • Bookkeeping : Let us handle your record books and expense reports.
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