Property Purchase Prep for Concreters Buying First

Getting your finances sorted before you start looking at properties will save you months of stuffing around.

Concreters who work contract-to-contract or run their own business face different hurdles to PAYG workers when applying for a home loan. Lenders want to see consistent income, but your tax returns might tell a different story if you've been claiming every tool, vehicle expense, and deduction you're entitled to. The trick is knowing what you need ready before you apply, what deposit you actually need, and which government schemes apply to your situation.

How Much Deposit You Actually Need

You can apply for a home loan with as little as a 5% deposit if you use the Regional First Home Buyer Guarantee or the First Home Loan Deposit Scheme. Without these schemes, most lenders want 10% minimum, though you'll pay Lenders Mortgage Insurance (LMI) on anything under 20%.

LMI protects the lender if you default, not you. It can add thousands to your loan amount or upfront costs. On a $500,000 property with a 10% deposit, LMI might cost you $12,000 to $16,000 depending on the lender. Some lenders will capitalise this into the loan, others want it paid upfront. If you qualify for a government scheme that waives LMI, you avoid this cost entirely.

The low deposit options available to tradies include gift deposits from family. Most lenders accept gifted funds for part or all of your deposit, provided you get a signed declaration from whoever gives it to you confirming it's not a loan. If your old man wants to chip in $20,000, that's legitimate deposit money.

Proving Your Income When You're Self-Employed

Lenders typically want two years of full tax returns if you're self-employed or running your own concreting business. They assess your income after deductions, which is where most tradies get caught short. You might have invoiced $120,000 last year, but if you've claimed $45,000 in deductions, the lender sees $75,000 income.

In our experience, concreters who prepare early often adjust their deductions in the year before they apply. You don't want to pay more tax than you need to, but if you're planning to buy your first home in the next 12 months, talk to your accountant about balancing deductions against declared income. A $5,000 higher tax bill might increase your borrowing capacity by $30,000 or more.

Some lenders will accept bank statements showing cash flow instead of full financials, particularly if you've been in business for less than two years. This is called low doc lending, and it comes with slightly higher interest rates, but it's an option if your tax returns don't reflect what you're actually earning. The specifics depend on your ABN length, your industry, and the lender's current appetite for self-employed borrowers.

Understanding Pre-Approval Before You Start Looking

Pre-approval tells you what you can borrow before you start making offers on properties. It's not a guarantee, but it gives you a number to work with and shows agents you're serious.

Most lenders will give you conditional approval based on the documents you provide, then do a full assessment once you've found a property. The conditional approval is valid for three to six months depending on the lender. During that time, don't change jobs, take on new debt, or miss any repayments on existing loans. Any of those things can blow up your approval when it comes time to settle.

Getting loan pre-approval takes one to three weeks once you've submitted all the documents. If your income is straightforward and you've got your tax returns, payslips (if you do some PAYG work), and bank statements ready, it moves faster. If you're missing documents or your income needs explaining, it takes longer.

The Government Schemes That Apply to Tradies

The First Home Loan Deposit Scheme and Regional First Home Buyer Guarantee let you buy with a 5% deposit without paying LMI. You need to be an Australian citizen, earn under the income cap (currently $125,000 for singles or $200,000 for couples), and buy a property under the price cap for your state.

The property price caps vary by location. In regional areas, you might have a cap of $600,000 to $650,000 depending on the state. In metro areas, it's higher. The government guarantees 15% of the loan, which means the lender treats your 5% deposit like a 20% deposit and doesn't charge you LMI.

These schemes have limited spots each year and they fill up fast. If you're planning to use one, get your home loan application sorted early in the financial year when the new allocation opens up.

First home owner grants (FHOG) are different again. Most states offer a cash grant if you're buying a new or substantially renovated property. In Queensland, for example, it's $30,000 for new builds under $750,000. That's actual cash you can use for your deposit or costs. Check your state's specific scheme because the rules and amounts change.

Fixed Versus Variable Interest Rates

You'll need to decide whether to lock in a fixed interest rate or go variable. Fixed rates give you certainty for one to five years, but you can't make extra repayments above a certain limit without penalty, and you can't access an offset account with most fixed loans.

Variable interest rates move with the market. They come with more flexibility, including full offset accounts and unlimited extra repayments. If rates drop, you benefit immediately. If they rise, your repayments go up.

A split loan gives you both. You might fix 50% of your loan at a set rate and leave 50% variable with an offset account attached. This gives you some protection if rates climb while keeping flexibility for extra repayments. The split doesn't have to be 50-50. You can split it however makes sense for your budget and risk tolerance.

Consider a buyer who wants to pay down debt quickly. He's earning solid money from residential and commercial jobs, and he plans to throw $10,000 to $15,000 a year in extra repayments at the loan. A fully fixed loan would charge him break fees for those extra payments, so he goes variable with an offset account. His income fluctuates, so he parks cash in the offset when work is busy, then draws it out when jobs are thin. The offset reduces his interest without locking the money away.

Your First Home Loan Application Documents

You'll need your last two years of tax returns and notices of assessment if you're self-employed. Add three to six months of bank statements for every account you hold, including business accounts if you run your own show. Lenders want to see how you manage money, how much you save, and whether you're regularly overdrawn or bouncing payments.

If you've got an ABN, bring your business financials or profit and loss statements. If you do contract work but you're on the books as PAYG with a labour hire company, your last two payslips and a letter from your employer will do. If you've been doing a mix of both, you'll need everything.

Proof of existing debts matters too. Car loans, personal loans, credit cards, buy now pay later accounts. Even if you've paid off your credit card, the lender counts the limit as potential debt when they calculate your borrowing capacity. If you've got a $10,000 limit on a card you never use, that can reduce what you can borrow by $50,000 or more. Cancel the cards you don't need before you apply.

What to Do Right Now

Pull your last two tax returns and check what income the lender will see. If it's lower than you expected because of deductions, talk to your accountant before you apply. Get your bank statements in order and close any accounts or credit cards you're not using. If you're planning to use a government scheme, check the price caps and income limits for your state, then work out whether you qualify.

Call one of our team or book an appointment at a time that works for you. We'll go through your income, deposits, and what you need ready before you apply so you're not scrambling for documents when you find the right place.

Frequently Asked Questions