Public accountants, those working in public practice serving external clients, sit in a slightly different position to accountants employed in commerce or government, mainly because of how their income is structured. Many are self-employed practitioners or partners, which shapes how a lender assesses a home loan application even though the professional concessions remain available. With variable rates around the 6% mark and a Lenders Mortgage Insurance waiver potentially worth tens of thousands, understanding how public practice income is treated is the key to a smooth application.
Presenting public practice income in its strongest form, and confirming your eligibility, is something a mortgage broker for accountants handles regularly. This article explains the concessions available to public accountants, how their income is assessed, the partnership and practice-ownership realities, and what the benefits do not change.
Key Takeaways
- Public accountants access the same professional concessions as other eligible accountants, including the LMI waiver and possible rate discounts.
- Eligibility rests on recognised membership such as CPA Australia, CA ANZ, or the IPA, not on working in public practice as such.
- Many public accountants are self-employed or partners, so income is often assessed on tax returns, financials, or profit-share.
- The waiver lowers cost but does not change serviceability, assessed at the actual rate plus 3 percentage points.
The Concessions Available to Public Accountants
It is worth confirming the baseline before turning to the income specifics. A public accountant who holds current membership of a recognised body such as CPA Australia (Certified Practising Accountant), Chartered Accountants Australia and New Zealand (CA ANZ), or the Institute of Public Accountants (IPA) accesses the same professional concessions as any eligible accountant. The principal benefit is a waiver of Lenders Mortgage Insurance (LMI), the premium normally charged on borrowing above 80% of a property’s value, often up to 90% and sometimes 95%, which on a higher-loan-to-value-ratio (LVR) purchase around the $1 million mark could save a premium exceeding $20,000. Possible rate discounts also apply. The eligibility flows from the recognised membership, not from working in public practice in itself.
How Public Accountants’ Income Is Assessed
The defining feature for many public accountants is that they do not earn a simple salary, and lenders assess each income structure differently. Understanding how yours is treated is central to a realistic application.
Self-Employed Practice Owners
A public accountant running their own practice is generally assessed on two years of tax returns and financial statements, with the Australian Business Number usually registered for around two years. Lenders look at the net profit of the business and may add back certain non-cash expenses such as depreciation. Some lenders consider one year of returns for established practitioners meeting certain criteria.
Partners in a Practice
A partner is often assessed on profit-share or income distribution rather than salary. Lenders experienced with the profession can frequently focus on your individual earnings rather than requiring full financial statements for the whole practice, and at some larger firms an income letter may be accepted in place of tax returns.
Salaried Public Accountants
A public accountant employed within a practice on a salary is generally assessed on payslips like any salaried applicant, with bonuses considered where a track record supports them. This is often the most straightforward income structure to evidence, and the concession applies on the same terms as for any eligible accountant.
Practice Ownership and Borrowing Capacity
For public accountants who own or share in a practice, the way income flows through the business has a direct bearing on borrowing capacity. It is worth understanding the relationship.
Lenders assess the income you can demonstrate from the practice, drawn from net profit, distributions, or director wages, rather than the practice’s turnover, so how the business is structured and how profit is taken can affect the figure used. Legitimate add-backs can lift assessable income, while a year of lower profit can reduce it, which is why a consistent two-year picture tends to support the strongest assessment. Whatever the figure, the lender then tests your ability to service the loan at the actual rate plus a buffer of 3 percentage points set by the Australian Prudential Regulation Authority (APRA), roughly 9% at current rates, applied across all your commitments. For a practice owner, the assessed business income is often the practical limit on borrowing, regardless of the waiver.
What the Concessions Do Not Change
It is important to be clear that, for public accountants as for any borrower, the concessions reduce cost rather than altering how much you can borrow. The assessment still governs the outcome.
Whatever your role in public practice and whatever concession applies, the lender still assesses serviceability at the actual rate plus the 3 percentage point buffer. The LMI waiver removes a cost but does not relax that test, and a rate discount lowers repayments without lifting your assessed borrowing capacity in any meaningful way. Your income, expenses, existing debts, and credit history continue to drive the approval, so the concessions are best seen as lowering the cost of a loan you can already support, particularly important for a self-employed public accountant whose assessable income is the main constraint.
Frequently Asked Questions (FAQs)
Do public accountants qualify for the LMI waiver?
Generally yes, where they hold current membership of a recognised body such as CPA Australia, CA ANZ, or the IPA. The waiver keys off that membership rather than working in public practice in itself, and it can apply up to 90% of the value and sometimes 95%. It must be requested and your membership evidenced.
How is my income assessed if I own my practice?
Typically on two years of tax returns and financial statements, with your Australian Business Number usually registered for around two years. Lenders assess the net profit of the business and may add back certain non-cash expenses such as depreciation. Some lenders accept one year of returns for established practitioners meeting certain criteria.
I am a partner in a practice. How does that work?
Lenders experienced with the profession can often assess you on your individual profit-share or income distribution rather than requiring full financial statements for the whole practice. At some larger firms, an income letter may be accepted in place of tax returns. The professional concession applies where you hold a recognised membership.
Does practice turnover determine how much I can borrow?
No, the income you can demonstrate from the practice does. Lenders look at net profit, distributions, or director wages rather than turnover, so how profit is taken matters. Legitimate add-backs can lift assessable income, and a consistent two-year picture tends to support the strongest assessment, which then feeds the serviceability test.
Do the concessions apply to investment properties?
Often yes, where you hold a recognised membership and the lender extends the concession to investment lending, though terms can differ, with investment loans sometimes capped at a lower LVR. As with owner-occupied lending, the concession needs matching to a lender whose policy supports both your membership and your purpose.
Does qualifying mean I can borrow more?
Not in any meaningful way. The concession lowers the cost of borrowing rather than lifting your capacity, which the lender assesses at the actual rate plus a 3 percentage point buffer. For a self-employed public accountant, the assessed business income is often the main limit on how much you can borrow, regardless of the waiver.
The Bottom Line
Public accountants access the same professional concessions as any eligible accountant, with eligibility resting on recognised membership such as CPA Australia, CA ANZ, or the IPA rather than on public practice itself. The LMI waiver can remove a premium exceeding $20,000 on a higher-LVR loan, sometimes alongside a rate discount. Because many public accountants are self-employed or partners, the practical focus is income assessment, drawn from two years of returns, profit-share, or, for salaried staff, payslips, and the assessed income is often the real constraint on borrowing. None of it changes the serviceability test at the actual rate plus 3 percentage points, so the sensible step is to present your practice income clearly and match it to the right lender.