Short answer
No. CMHC says income for a sole proprietorship or partnership may be grossed up by 15% or assessed through eligible add-backs. “May” is not an automatic increase, and it is not a rule for incorporated business revenue.
The client concern
A buyer multiplies line 15000 or company sales by 115% and assumes the new amount is the approval income. The application then fails because the wrong base number or business type was used.
What the official guidance establishes
CMHC’s published Self-Employed program recognizes that sole proprietors and partners may deduct expenses and describes a 15% gross-up or eligible add-back approach, supported by acceptable documents.
What it does not guarantee
The 15% is not applied to gross sales, every tax line or every corporation. The lender and insurer verify the income and business. Using an add-back and a gross-up together without policy support can double count the same adjustment.
A practical Ontario example
Illustration only: A sole proprietor reports $80,000 of supported net self-employment income. A permitted 15% treatment would be materially different from adding 15% to $250,000 of gross deposits. The lender must confirm which figure and method apply.
Practical options to explore
Have the broker identify the legal business structure and exact tax line, then obtain the lender’s current calculation. Compare the gross-up with an eligible add-back method and use only the supported result. Do not restructure tax filings solely for a mortgage without advice from the client’s accountant.
Questions worth asking
- Which income method is this lender actually using?
- Is the number based on tax income, business cash flow or property equity?
- Which deposits, expenses and add-backs are independently supported?
- What are the total rate, fee, term and exit costs?
- Can the file move from alternative, MIC or private financing back to A lending—and when?
Rajiv’s broker perspective
A self-employed mortgage should tell the complete business story without stretching the facts. I would first test the strongest supportable A or insured method, then compare alternative/B cash-flow approaches where appropriate. MIC or private financing can solve an equity or timing problem, but it should have a realistic exit. The goal is not to manufacture a larger income number; it is to match verified evidence with a lender whose policy understands the business.
Related: Mortgage Knowledge Centre · Declined? Start here · Updates & Rules Centre
Does your business earn more than your tax return seems to show?
Bring the tax returns, business statements and the problem you are trying to solve. Rajiv can test the practical A, insured, alternative/B, MIC and private routes and identify the evidence each path needs.