Tax debt loans Australia-wide
Tax debt loans: how to refinance or consolidate an ATO debt
An ATO tax debt does not sit still. Interest is charged daily, and since 1 July 2025 it is no longer tax deductible. If you own property or run a business, there is usually more than one way to deal with it. We search a panel of 75 lenders, including non-bank and specialist lenders that may consider an ATO debt, and explain each option in plain English.
The ATO tax debt interest rate: what the debt is costing you
The ATO charges a general interest charge, or GIC, on tax paid late. It is set every quarter under section 8AAD of the Taxation Administration Act 1953, and the daily rate is the annual rate divided by the days in the year. According to the ATO's general interest charge rates page, the annual rate is:
- July to September 2026: 11.43% a year, or 0.03131507% a day.
- October to December 2026: 11.51% a year, or 0.03153425% a day.
Source: ATO, General interest charge (GIC) rates, page last updated 4 September 2026. Checked by us on 9 September 2026. GIC changes every quarter, so confirm the current figure on the ATO page.
Two things make GIC harder to live with than the headline number suggests. First, it compounds daily. The ATO's payment plans page puts it plainly: tax debts on a payment plan continue to accrue GIC, which compounds daily. Interest is charged on yesterday's interest until the balance is cleared.
Second, the tax treatment changed. The ATO's page on denying deductions for ATO interest charges (last updated 8 June 2026) confirms that taxpayers can no longer claim an income tax deduction for ATO interest charges incurred on or after 1 July 2025. That covers GIC and the shortfall interest charge (SIC), whichever income year the debt relates to.
The ATO payment plan interest rate is the same GIC
People often search for the ATO payment plan interest rate as if it were a separate, softer figure. It is not: a debt on a standard payment plan is charged GIC at the same rate, compounding daily. That is why property-secured lending gets considered instead. The interest rate and repayment schedule are set by the loan contract rather than growing every day, and whether it costs less overall depends on the rate, the term and how fast you pay it down. How this applies to you is a question for a registered tax agent.
Does tax debt affect a home loan? What lenders look at
Yes, in two ways. A tax debt is a liability, so it reduces what you can borrow the same way a personal loan would. It is also a character signal: an assessor wants to know how the debt got there, what you have done about it, and whether it will happen again. Expect to be asked for:
- Your ATO statement. Usually the integrated client account statement or a portal printout showing the balance, how it built up and every payment against it.
- Evidence of any payment plan, and proof you have been meeting it.
- The reason for the debt. A one-off event, such as a large capital gain, illness or a bookkeeping gap since fixed, reads very differently from never setting tax aside.
Major banks versus non-bank and specialist lenders
Major banks are generally cautious about an applicant with an outstanding ATO debt. Many want it cleared before settlement or, at minimum, on a documented payment plan you are meeting.
Non-bank and specialist lenders tend to be more flexible. Some will refinance an existing home loan or business loan to include the tax debt and pay the ATO directly at settlement, provided the story makes sense and the numbers work. A tax debt loan with bad credit is sometimes possible too: a few specialist lenders may still look at a file with defaults on it, with pricing and conditions that reflect the risk. None of this is a promise of approval. What we can do is put your application in front of lenders whose credit policy allows for an ATO debt, rather than burning a credit enquiry on one that does not.
Whichever lender it is, a plan you are meeting reads better than a debt you are ignoring. If you are not yet on a plan, getting onto one is often the first move.
Tax debt home loan, ATO debt consolidation loan or payment plan: your options
There is no single ATO tax debt loan product. There are four broad paths, and which one fits depends on whether the debt is personal or business, whether you own property, and how much of the balance is compounding interest.
An ATO payment plan
A payment plan spreads the debt over weekly, fortnightly or monthly instalments across what the ATO calls the shortest possible fixed period of time. It keeps the debt unsecured and keeps you engaged with the ATO. The trade-offs, set out on the ATO's payment plans page (last updated 24 February 2026), are real: GIC keeps accruing, refunds are offset against the debt, and every future tax bill must be paid in full and on time or the plan can default and the whole balance falls due. Some interest-free plans exist for small business activity statement amounts, so ask your tax agent what you qualify for.
Refinance to pay tax debt: roll it into your home loan
If you own property with enough equity, some lenders will refinance your existing home loan for a larger amount and pay the ATO directly at settlement. The tax debt leaves the ATO's books and becomes part of one home loan repayment on a contracted rate and schedule, instead of a GIC balance that grows every day you leave it. This is what most people mean by a tax debt home loan or an ATO debt consolidation loan. Our refinance calculator and equity calculator are a useful first look.
A separate split or second loan against your property
Sometimes it is better to leave your existing home loan alone and add a separate split, or a second mortgage, sized to the tax debt only. That keeps the tax debt on its own shorter term so it is paid off faster, and keeps a good existing loan intact.
A business loan or asset-backed facility for a company debt
Where the debt belongs to a company or trading business, a business loan, an overdraft or a facility secured against business property, equipment or vehicles can pay the ATO out without touching the family home. Lenders here want the financials, the ATO statement, a credible explanation and a plan for keeping future BAS and PAYG current. See debt consolidation on our services page.
When none of these is right
If the debt is small and you can clear it within a few months, a payment plan is usually the sensible answer. If the business behind the debt is not viable, borrowing against your home to keep it afloat turns a business problem into a personal one. If the numbers only work by stretching the debt over thirty years, we will say so.
Business tax debt loans: BAS, PAYG withholding and super
Most business tax debts we see are activity statement debts: GST, PAYG withholding taken from staff wages and PAYG instalments that fell due while cash was needed elsewhere. Superannuation guarantee shortfalls are treated more strictly and, like unpaid PAYG withholding and GST, can be pursued against directors personally under the ATO's director penalty rules, so they need your accountant's attention first.
The ATO can report a business tax debt to credit bureaus
The ATO's page on disclosure of business tax debts (last updated 15 October 2025) says it may report a debt to credit reporting bureaus only where all of the following apply:
- the business has an ABN and is not an excluded entity;
- it has one or more tax debts and at least $100,000 is overdue by more than 90 days;
- it is not engaging with the ATO to manage the debt; and
- it has no active complaint with the Tax Ombudsman about the ATO's intention to report.
The ATO sends a written notice of intent first and the business has 28 days to act. What gets reported is the ABN, the legal and business name, the entity type and the amount overdue, and the listing is removed once the criteria are no longer met.
The third point matters most. Being on a payment plan, and complying with it, counts as engaging with the ATO, so the debt is not reported while you keep to the plan. If you have received a notice of intent, those 28 days are the window to set up a plan or arrange finance that pays the ATO out, so talk to your accountant and to us in the same week. For a director who owns property, a home loan refinance or a separate split can be the cleanest way to clear a company debt, but it moves a business risk onto a personal asset, so the warning above applies.
How we work
Tax debt applications are not harder than any other, just better evidenced. This is how it runs:
- The conversation. A phone, video or WhatsApp chat about how the debt arose, what you have done about it and what you own. No judgement. We have seen every version of this story.
- The documents. Your ATO statement, any payment plan details, recent tax returns or financials, payslips or business bank statements, and current loan statements. We tell you exactly what to pull.
- The lender search. We search a panel of 75 lenders and shortlist the ones whose credit policy allows for an ATO debt in your situation, then show you the total cost of each option over its full term, next to staying on a payment plan.
- Settlement pays the ATO. Once approved, the lender either pays the ATO directly at settlement or releases the funds for you to pay it, against an up-to-date ATO payout figure. You are left with one repayment on a known schedule.
- The follow-up. We check in after settlement to make sure the loan is doing its job and the tax side is staying current, and a free mortgage health check down the track tells you whether it still fits.
On a home loan, our service costs you nothing: the lender pays us when your loan settles. If a fee ever applied to a particular type of finance, we would tell you first and agree it in writing before doing any work. Queensland-based, lending Australia-wide, by phone, video and e-signature.
Common questions
Questions we get about ATO tax debt
Can you get a home loan with ATO debt?
Often, yes, but it depends on the lender. Many major banks want the debt cleared or on a payment plan you are meeting. Non-bank and specialist lenders are generally more flexible, and some will refinance your home loan to include the tax debt and pay the ATO at settlement. Lenders will typically ask for the ATO statement, the payment history and an explanation of how the debt arose.
What is the ATO tax debt interest rate?
The ATO charges a general interest charge (GIC) on overdue tax, set each quarter. For July to September 2026 the annual rate is 11.43%, and for October to December 2026 it is 11.51%, per the ATO's GIC rates page (last updated 4 September 2026). It compounds daily and applies on a payment plan too. Rates change every quarter, so check the ATO page for the current figure.
Can a business tax debt be refinanced?
In many cases, yes. Overdue BAS, PAYG withholding and income tax owed by a company or sole trader can sometimes be refinanced into a business loan, an asset-secured facility, or a home loan refinance where a director owns property. The lender pays the ATO at settlement, or releases the funds to pay it, and the business makes one repayment. Superannuation guarantee debts are treated differently, so talk to your accountant first.
Is it better to keep the ATO payment plan or refinance?
There is no single answer. A payment plan keeps the debt unsecured and short, but GIC compounds daily and a missed future tax bill can default the plan. Refinancing brings the balance under one property-secured repayment, but it puts the debt against your home and, over a longer term, can cost more in total interest even at a lower rate. We lay both paths out side by side, with your registered tax agent in the conversation.
Send the ATO statement, we will do the rest
Let's work out what to do about your tax debt
Send us your ATO statement and current loan details and we will tell you honestly whether refinancing looks worth exploring, and which types of lenders may consider it. No obligation. Queensland-based, lending Australia-wide.