Key Takeaways
- Accounting firm partners access the same professional concessions as other eligible accountants, including the LMI waiver and possible rate discounts.
- Income is generally assessed on profit-share or distributions, using two years of personal tax returns, or an income letter at some larger firms.
- Partnership structure can prompt requests for full firm financials, though a personal home loan often does not require them.
- The waiver lowers cost but does not change serviceability, assessed at the actual rate plus 3 percentage points.
Becoming a partner in an accounting firm is a significant career step, but it changes how a lender assesses a home loan in ways that catch many partners by surprise. Income arrives as profit-share or distributions rather than a simple salary, and the partnership structure itself can prompt a lender to ask for far more than a standard applicant would face. With variable rates around the 6% mark and a Lenders Mortgage Insurance waiver potentially worth tens of thousands, understanding how partnership income is assessed, and how to avoid unnecessary documentation, is what makes the difference between a smooth application and a frustrating one.
Navigating partnership income and structure with a lender that understands it is something a mortgage broker for accountants handles regularly. This article explains the concessions available to partners, how partnership income is assessed, the structural issues that can complicate an application, and how the right approach keeps it simple.
The Concessions Available to Partners
It is worth confirming the baseline before turning to the partnership-specific issues. A partner 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. Partnership status does not remove eligibility; it mainly shapes how income is evidenced.
How Partner Income Is Assessed
The defining feature of a partner’s application is that income is not a payslip figure, and lenders have specific ways of assessing it. Understanding the options helps you prepare the right evidence.
Profit-Share and Distributions
A partner is generally assessed on their share of partnership profit or income distribution, typically evidenced through two years of personal tax returns and notices of assessment. Where your share of income is stable and sufficient to service the loan, this is usually the cleanest route, and lenders experienced with the profession can often focus on your individual earnings rather than the firm as a whole.
Income Letters at Larger Firms
Partners at some larger firms may be able to evidence income through a letter from the firm’s administration or finance function, used in place of full self-employed documentation. This can simplify the process considerably, though availability depends on the firm and the lender, and is more common where borrowing is at a conservative LVR.
Where Salary Is Sufficient
In some arrangements, where a partner draws a salary that on its own services the proposed debt, a lender may accept recent payslips rather than full financials. Whether this applies depends on how your income is structured and the lender’s policy, so it is worth establishing early.
Structural Issues That Can Complicate an Application
Partnerships carry features that ordinary employment does not, and these can prompt a lender to ask for more unless the application is handled carefully. Being aware of them helps you avoid unnecessary documentation.
Because a partnership is not a separate legal entity, partners share the firm’s assets and liabilities, a concept sometimes described as joint and several liability, and standard policy at some lenders is to request financial statements and tax returns for any business in which you hold a share contributing more than a quarter of your income. For a partner in a sizeable firm, providing whole-of-firm financials can be intrusive or impractical. The important distinction is that a home loan applied for in your personal name often does not require the lender to assess the entire firm’s financial position, whereas a commercial loan in the firm’s name would. A lender familiar with partnership structures can frequently confine the assessment to your personal income, which is why matching the application to the right lender matters so much for partners. The serviceability test still applies, assessing your ability to repay at the actual rate plus a buffer of 3 percentage points set by the Australian Prudential Regulation Authority (APRA), roughly 9% at current rates.
Frequently Asked Questions (FAQs)
Do accounting firm partners 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. Partnership status does not remove eligibility; it mainly affects how income is evidenced. The waiver can apply up to 90% of the value and sometimes 95%, and must be requested with your membership evidenced.
How is my income assessed as a partner?
Usually on your share of partnership profit or income distribution, evidenced through two years of personal tax returns and notices of assessment. Lenders experienced with the profession can often focus on your individual earnings rather than the whole firm. At some larger firms, an income letter may be accepted in place of full documentation.
Will I need to provide the whole firm’s financial statements?
Often not for a personal home loan. While standard policy at some lenders is to request financials for a business contributing more than a quarter of your income, a home loan in your personal name frequently does not require the lender to assess the entire firm. A commercial loan in the firm’s name would. A lender familiar with partnerships can usually confine the assessment to your personal income.
What is joint and several liability, and does it affect my loan?
Because a partnership is not a separate legal entity, partners share the firm’s assets and liabilities, which is what joint and several liability refers to. It can prompt some lenders to look more closely at the firm, but it does not prevent a personal home loan. The practical effect is mainly on documentation, which the right lender can keep proportionate.
Can I borrow more as a partner because my income is higher?
Higher income generally supports greater capacity, but the concession itself does not lift how much you can borrow. The lender assesses your repayments at the actual rate plus a 3 percentage point buffer, and your assessable share of partnership income, along with existing commitments, determines the figure. Presenting your income clearly is what ensures it is fully recognised.
Does the waiver apply if I am buying an investment property?
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. The concession needs matching to a lender whose policy supports both your membership and your purpose.
The Bottom Line
Accounting firm partners access the same professional concessions as any eligible accountant, with eligibility resting on recognised membership such as CPA Australia, CA ANZ, or the IPA. The LMI waiver can remove a premium exceeding $20,000 on a higher-LVR loan, sometimes alongside a rate discount. The real distinction for partners is income and structure: assessment is generally on profit-share or distributions through two years of personal returns, or an income letter at some larger firms, and while the partnership structure can prompt requests for full firm financials, a personal home loan often avoids that with the right lender. None of it changes the serviceability test at the actual rate plus 3 percentage points, so the sensible step is to present your individual income clearly and choose a lender that understands partnerships.