By Jason Given · April 2026 · 5 min read
More take-home pay means more borrowing capacity
The revised Stage 3 tax cuts reduced the 19% tax rate to 16% and the 32.5% rate to 30%, benefiting most income brackets. For borrowers, the impact goes beyond the extra cash in your pocket - it directly increases the amount lenders will approve because they assess your net income after tax.
For a single income of $90,000, the tax cut adds approximately $1,900 per year in take-home pay. For a dual-income household earning $180,000 combined, the benefit is roughly $4,500 per year. Lenders convert this additional net income into borrowing capacity using their serviceability calculators.
The practical impact
An extra $4,500 per year in net income typically translates to $25,000-$35,000 in additional borrowing capacity. That might not sound transformative, but for buyers who are right on the edge of affordability - particularly first home buyers - it can be the difference between qualifying and missing out.
The Stage 3 tax cuts took effect on 1 July 2024, so any current lender assessment already uses the new tax rates. If you are relying on an older assessment, or your income has changed since, it is worth getting a fresh pre-approval.
Want to know your updated borrowing capacity? Book a chat - we will run your numbers across 60+ lenders with the current tax rates factored in.
Frequently asked questions
How much more can I borrow because of the tax cuts?
The Stage 3 tax cuts increased take-home pay for most income brackets. A household earning $150,000 combined takes home approximately $4,500 more per year. Translated to borrowing capacity, this adds roughly $25,000-$35,000 to what lenders will approve - the exact figure depends on the lender and your other commitments.
Do lenders automatically factor in the new tax rates?
Yes - lenders update their serviceability calculators when tax rates change. The cuts took effect on 1 July 2024, so current assessments already reflect them. If your income or debts have changed since your last assessment, a fresh pre-approval will give you an up to date figure.
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