NSW Court Rules Tiny Home on Wheels Cannot Bypass Planning Laws

After a lengthy court battle, a couple have lost their legal fight to remain in their "dream" tiny home on the Far South Coast of New South Wales.

In 2023, Gordon Kelly allowed Josh Heins and Manu Bohn to park their tiny home on wheels on his Coolagolite property, which is zoned for primary production.

But following a complaint from a member of the public, last year Bega Valley Shire Council ordered the home be vacated and demolished, arguing it was an unauthorised structure being used as a permanent residence without the required planning approval.

In response, Mr Kelly launched legal action against the orders in the NSW Land and Environment Court, arguing the home did not require development consent from the council because it was easily transportable and capable of registration.

On Wednesday, the court ruled that while their tiny home on wheels can legally fall within the definition of a caravan, even if it looks much more like a conventional house and has permanent-looking fixtures and connections, it cannot bypass NSW planning law governing the use of land.

"For a long time, it felt like that dream was possible," Mr Heins said in a statement.

However, Mr Kelly did have one victory: the court found the council could not legally order the demolition of the caravan, as it fell outside the definition of a building.

During a hearing in June, lawyers for the council told the court they were concerned about the precedent a ruling in the couple's favour would set for future housing in the region and across the state.

They told the court the home was "flouting planning laws" by having an "elaborate system of pipes" used for wastewater and that it was a bushfire risk.

Implications for other tiny home owners

Under NSW law, one caravan can be installed on a property without needing council approval if it is associated with an occupied house and used by members of the household, and an approved main dwelling already exists on the land.

Australian Tiny House Association president Danielle Lester said the decision had important implications for all tiny house owners across the state.

"Essentially this is not a good outcome for those wanting to rent land to put a tiny house on wheels, on or even to put one in their backyard for a family member," she said.

"One positive of this decision is that it has reaffirmed an earlier judgement, from 2018, that a caravan can be approved as a dwelling with development consent in NSW — councils seem unaware of this.

According to data from the NSW Housing Register, the number of people in the Bega Valley waiting for social housing has risen by almost one third to 217 since Mr Heins and Mr Bohn moved into their tiny home.

In a statement to the ABC, a spokesperson for Bega Valley Shire Council welcomed this week's decision.

"More broadly, it is important to note that each case must be assessed on its individual circumstances, including the nature of the dwelling, how it is being used, and the planning controls that apply to the land," they said.

"Council recognises that tiny homes can play a role in providing diverse housing options; however, they must be established and occupied in accordance with the applicable planning framework."

This week, a state-first pilot allowing mobile tiny homes to be installed on residentially zoned land as long-term rentals began in Shellharbour, to create more flexible and cheaper housing with the possibility of future planning changes.