Property equity may create options — and real responsibilities
A secured ATO debt loan uses an asset acceptable to a lender as security. Depending on the facility, this may involve a mortgage or other security arrangement. Available equity, existing lending and the property valuation all matter.
Security may support an application that does not fit an unsecured lender’s criteria. It does not guarantee approval or a lower overall cost. If repayments are not met, the lender may enforce its security and you could lose the secured asset.
Know your exit before you enter
Short-term facilities need a credible repayment or refinance plan. Do not assume a future refinance will be available. Get independent advice on the loan documents, particularly if the family home or another person’s property is involved.
- Request the interest rate, term and all fees in writing.
- Check the priority of the new security and existing lender consent.
- Allow for valuation and legal costs.
- Stress-test the repayment or exit strategy.
Who secured ATO debt loans tend to suit
Secured lending can suit a business owner who holds equity in property or another acceptable asset and whose circumstances — such as a larger debt, a complex credit history, or a need for a longer term — may not fit comfortably within unsecured lending criteria. If you are confident in your capacity to repay and comfortable with the asset being used as security, it is worth exploring properly with a broker who can explain the trade-offs clearly.
It is unlikely to suit someone who is uneasy about the risk of losing the secured asset, or where the only available security is a family home shared with someone who has not been fully informed and independently advised. Security may widen your options, but it also raises the stakes if repayments are missed, and that trade-off deserves careful, unhurried thought before signing anything.
Comparing the real cost of secured finance
Secured facilities can offer different pricing and terms to unsecured options, but valuation fees, legal costs and establishment fees can add up quickly. Compare the full quote, not just the rate, against your [rates and fees](/rates-and-fees) reference point, and use the [ATO GIC calculator](/ato-gic-calculator) to see what the alternative of leaving the debt with the ATO could cost over the same period, keeping in mind GIC is no longer tax-deductible from 1 July 2025.
What lenders look at and documents to prepare
Secured lenders will assess the available equity, the asset’s valuation, any existing mortgage, and your capacity to service repayments, alongside the ATO debt itself and the reason it arose.
- Recent valuation or rates notice for the proposed security property.
- Details of any existing mortgage or other registered security.
- Your current ATO statement of account.
- Recent bank statements and financial information.
A hypothetical example
Hypothetical only: a business owner has equity in a commercial property and an ATO debt of $150,000. A secured facility with an illustrative term of three years and round, indicative repayments could offer a lower rate than an unsecured option, but requires a mortgage over the property. These figures are illustrative only and not an offer — actual terms depend on valuation, lender policy and your financial position, and should be confirmed with a broker before any commitment is made.
How the process works with our specialist team
Our tax debt finance team is led by Kevin Knight, Principal Finance Broker and MFAA Accredited Finance Broker with over 20 years in Australian banking. We talk through the security implications with you before any application proceeds, so there are no surprises later.
- You discuss the available property or asset and the ATO balance.
- Our team outlines likely lender requirements, including valuation and legal steps.
- You seek independent legal advice on the security documents.
- If you proceed, the application goes to a suitable lender, subject to approval, eligibility, terms and fees.
Common mistakes owners make
A common mistake is assuming security guarantees approval or a lower cost — it does not. Another is not getting independent legal advice before signing, particularly where a spouse or family member’s property is involved. Some owners also underestimate valuation and legal costs, which should be factored into the total cost of the facility from the outset rather than treated as an afterthought once the loan has been approved.
Questions owners ask
Frequent questions about secured tax debt finance.
- Does secured finance always cost less than unsecured? Not always — compare actual quotes rather than assuming.
- What happens if I cannot make repayments? The lender may enforce its security, which could mean losing the asset — read your contract carefully.
- Can I use a family member’s property as security? Only with their informed consent and, usually, independent legal advice for them.
- Is a personal guarantee still required if I offer security? It can be, depending on the lender and structure.
- How long does valuation and settlement typically take? It varies by lender and property type, so ask early so you can plan around ATO deadlines.
Key takeaway
Secured lending can open doors that unsecured finance cannot, but it puts a real asset on the line if repayments are not met. Our tax debt finance team can talk through whether the trade-off makes sense for your situation, and independent legal advice is strongly recommended before signing.
Keep exploring
Related reading to help you weigh up security against the alternatives.
