Tax debt loans: pay out the ATO using the property you already own
A tax debt loan is a loan secured against property, used to pay the Australian Taxation Office in full. The ATO debt is cleared on settlement day and you are left with one loan, one repayment and a set term. Soren Financial arranges these loans against homes, investment properties and commercial property for business owners across Australia. It sits alongside the rest of our commercial lending.
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On this page: Calculator · Who it suits · How it works · What lenders look at · Quiz · Loan or ATO payment plan · Before a small business restructure · Lenders we use · FAQs
ATO payment plan or loan: which costs you less?
Type in your own numbers. Nothing is saved until you ask for the full breakdown.
Get the full breakdown
After-tax cost of each option, how much of your property the loan would use, and what a lender is likely to say. We call within one business hour.
Estimates only. ATO interest compounds daily and the rate changes each quarter. Whether loan interest is deductible depends on your situation, so check with your accountant.
Who a tax debt loan suits
Most of the business owners who call us about tax debt have a business that still makes money. The debt built up over a bad year or two: a big client paid late, BAS got pushed back to cover wages, and the balance kept growing with interest on top.
The loan suits you if you own property with equity in it and the business is trading well enough to carry a repayment. It also helps if you would rather owe a lender on agreed terms than owe the tax office on theirs. Most people would.
It is a poor fit if there is no property, or if the business cannot afford any repayment at all. In that case a loan only moves the problem, and we will tell you so on the first call.
How a tax debt loan works
You send us your ATO statement of account, a list of what you own and owe, and your recent BAS. We work out how much equity is available and which lenders will consider the deal. The lender values the property, approves the loan, and at settlement the money goes straight to the ATO. You do not handle the funds.
The loan can sit behind your existing mortgage as a second loan, or we can refinance the whole lot into one new loan. Our cost to switch calculator shows what a refinance costs you in fees. Which is cheaper depends on your current rate and how long you need the money for.
"The call usually comes about six months later than it should. By then there is a payment plan that has fallen over and a letter on the kitchen bench. Ring when you first fall behind, because that is when every lender on the panel is still open to you."
Mansour Soltani, Director, Soren Financial. Certificate IV and Diploma in Finance and Mortgage Broking Management. FBAA member. AFCA member. Finsure Licence 384704. Credit Representative Number 527 161.
What lenders look at
A lender asked to pay out tax debt wants to know how the debt happened and why it will not happen again. They read the file in roughly this order.
The property
Type, location and how much is already owed against it. A house in a capital city gets a higher loan-to-value ratio than a shop in a strip with empty tenancies. We cover how lenders judge each property type on our commercial property loans page.
Your lodgements
Almost every lender wants BAS and tax returns lodged and up to date, even where the amounts are unpaid. If you are behind on lodging, fix that first. Your accountant is the person to do it.
The story
One clear cause, such as a lost contract or an illness, reads very differently to five years of paying the tax office last. Be straight about it. Lenders see the ATO account and will find out anyway.
The way out
For short-term loans the lender asks how they get repaid: sale of an asset, a refinance to a cheaper lender once the tax debt is gone, or cash flow from the business.
Will a lender pay out my tax debt?
Five questions. About one minute.
Tax debt loan or ATO payment plan?
A payment plan with the ATO is the right first step for a small debt you can clear quickly. It costs nothing to set up. For larger debts the comparison changes.
| ATO payment plan | Tax debt loan | |
|---|---|---|
| Security needed | None | Property |
| Interest | General interest charge keeps running on the balance | Lender's rate, set at approval |
| Is the interest tax deductible? | No. ATO interest charges stopped being deductible from 1 July 2025 | Ask your accountant. Interest on money borrowed for business purposes is often deductible |
| Term | Short. The ATO wants the debt cleared quickly | Longer terms are available against property |
| If you miss a payment | The plan can be cancelled and the full debt falls due | Normal loan arrears process |
| Credit file | The ATO can report business tax debts over $100,000 to credit bureaus if you are not dealing with them | Debt is paid out, so there is nothing for the ATO to report |
General information only. Check current ATO interest rates and your own tax position with a registered tax agent.
Before you sign up to a small business restructure
A small business restructure is a formal insolvency process for companies with debts under $1 million. A licensed practitioner puts a plan to your creditors, usually offering part payment over time, and you keep running the business.
It works well for the right company. It is also a formal insolvency appointment that sits on the public record, and it does nothing about personal guarantees you have given. If there is equity in property, get the loan option priced before you appoint anyone. Some owners find they can pay the ATO in full, keep their record clean and pay less overall. For others the restructure is the better road. If that is you, you will hear it from us. Accountants with a client in this position can see how we work with accountants.
"People are embarrassed about tax debt and they hide it, sometimes from their own partner. Nobody here is going to lecture you. Give us the real number and the real story. Half a story gets you half an answer from a lender."
Kylie Soltani, Co-Director, Soren Financial.
Lenders we use for tax debt
The big banks rarely lend to pay out the tax office. Most of this lending is done by non-bank lenders who price each deal on the property and the story behind the debt.
We place tax debt loans with MA Money, a non-bank lender.
Rates and fees are higher than a standard home loan, and they vary a lot from one lender to the next. You get a written credit quote before any work starts, so you know the cost of the loan and our fee, if there is one, up front.
Tax debt loan FAQs
Can I get a home loan with an ATO debt?
Yes, with the right lender. Some will pay the debt out as part of the new loan. Others want to see a payment plan in place and up to date. How lenders read business income is covered on our self-employed home loans page.
Can I refinance my home loan to pay tax debt?
Yes. If the equity is there, the tax debt can be rolled into a refinance or funded by a second loan behind your current lender.
I have received a director penalty notice. Is it too late?
No, but the clock is short. You generally have 21 days from the date on the notice. Call us and your accountant the same day.
Do my BAS need to be lodged?
For nearly every lender, yes. Lodged and unpaid is workable. Unlodged usually is not.
Will the ATO debt show on my credit file?
It can. The ATO is able to report business tax debts above $100,000 that are more than 90 days overdue where the business is not engaging with them.
How much can I borrow?
That comes down to the property value, what is already owed on it and what the business can repay. We can give you a range on the first call. For commercial security, the commercial property loan calculator will give you a starting figure.
Talk to a broker about your tax debt
Tell us what you owe and what you own. We call new enquiries within one business hour.
Soren Financial, 1/225 Pacific Highway, North Sydney NSW 2060. Phone 1300 899 819.
Why choose Soren Financial?
- 20+ commercial lenders, including the non-banks that fund tax debt
- More than $100 million in commercial lending settled each year
- A straight answer on whether a lender will do it, before you spend money on valuations
- One complete submission to the lender, so you are not asked for the same document three times
- Written credit quote before any work starts
This page is general information and does not take your circumstances into account. It is not tax, legal or insolvency advice. Soren Financial is a Credit Representative (527 161) of Finsure Finance and Insurance Pty Ltd, Australian Credit Licence 384704.