Alternative Housing Australia
Tiny House Rules and Regulations in New South Wales
Updated October 2026 | AHA Research Team
NSW allows a tiny home on wheels to be lived in long term without council approval, but only in one situation: a member of your household lives in it, on a property that already has a main house. This exemption comes from Clause 77 of the Local Government Regulation 2021, and it only applies while the home stays on its wheels.
Fixed tiny homes (without wheels) don’t have their own legal category in NSW. In a backyard, they’re treated as granny flats (secondary dwellings) under the Housing SEPP 2021. If the home is 60m² or less and your block is at least 450m² and eligible, you can get faster approval with a Complying Development Certificate (CDC). On rural land, that fast-track isn’t available, and the rules depend on your council.
Quick Answers
Can I live in a tiny home on wheels on a vacant block?
Only with council approval. Using a caravan or tiny home on wheels as your home on land with no house needs approval to install it under the Local Government Act 1993, and development consent under the Environmental Planning and Assessment Act 1979. There’s no fast-track complying development pathway for caravans.
Can someone live in a tiny home on wheels in my backyard?
Yes, if they’re part of your household. Under Clause 77 of the Local Government Regulation 2021, one caravan on land with a house can be lived in by the owner or members of the owner’s household without council approval. Someone outside your household isn’t covered.
How long can guests stay in a tiny home on wheels without approval?
Up to 2 days in a row, and no more than 60 days in any 12-month period. You can have up to two caravans, campervans or tents for guests on this basis.
Can I connect a tiny home on wheels to water and sewer?
Usually only with approval. Connecting a moveable dwelling to council sewer generally needs approval under Section 68 of the Local Government Act 1993, as do greywater systems and on-site sewage systems such as septic tanks and composting toilets. Rules vary between councils, so check with yours.
Can I build a fixed backyard tiny home without a full planning application?
Often, yes. A granny flat (secondary dwelling) of up to 60m² on a lot of at least 450m² can be approved as complying development by a council or private certifier, if it meets all the standards in the Housing SEPP. If it doesn’t, you’ll need a development application.
Do I need a building permit for a tiny home?
For a fixed tiny home, yes, always. For a tiny home on wheels, installing it under Clause 77 doesn’t need council approval, but only if it meets the legal definition of a caravan: it must keep its essential features as a trailer and stay genuinely moveable.
Tiny house on wheels (THOW)
Quick answer: You can keep one tiny home on wheels in your backyard for a member of your household without council approval to install it, as long as there’s already a house on the property and the tiny home meets the legal definition of a caravan. Most other setups need approval, including living on vacant land, having more than one for long-term living, and most plumbing and wastewater connections.
Is it a caravan or a building?
How the law treats your tiny home depends on whether it meets the legal definition of a caravan.
- A caravan is a moveable dwelling designed to be capable of being registered as a trailer. To count as one, it must keep its essential features as a trailer and stay genuinely moveable at all times.
- If it doesn’t meet that definition, it isn’t covered by the exemptions below and needs council approval, even if it’s sold as a “caravan.” Some councils report homes being marketed as caravans that don’t meet the legal requirements.
- If it’s fixed in place, for example connected to services or with footings or a verandah, council needs a development application to assess it.
When you don’t need council approval
Your household, long term. One tiny home on wheels can be lived in long term by you or a member of your household, as long as there’s already a main house on the property. (See “How the household exemption works” below.)
Short guest stays. You can have up to two tiny homes on wheels, campervans or tents for guests. They can’t be occupied for more than 2 days in a row, or for more than 60 days in total in any 12-month period.
Farm workers. On pastoral or agricultural land, a tiny home on wheels can be used, mainly during the season, by people employed in pastoral or agricultural work on that land.
After a natural disaster. If a natural disaster has displaced you, one tiny home on wheels can be installed on land to house you without council approval. It must be kept in a healthy and safe condition and removed within 2 years, unless your council’s local approvals policy allows longer.
How the household exemption works
This exemption comes from Clause 77 of the Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 2021.
It only covers installing it. Clause 77 means you don’t need council approval to install the tiny home. In some circumstances, you may still need development consent to use it, so check with your council.
It must stay a caravan. The exemption only applies while the tiny home keeps its essential features as a trailer and stays genuinely moveable at all times. If it’s fixed in place, for example connected to services or with footings or a verandah, it’s no longer covered, and council needs a development application to assess it.
What counts as a “member of your household”? This is the most debated part of the exemption. Clause 77 covers one caravan on land the owner occupies “in connection with the owner’s dwelling house,” used for habitation “only by the owner or members of the owner’s household,” and maintained in a safe and healthy condition. The councils we checked don’t explain what “household” means, and interpretations vary:
- Some guides say an independent tenant paying rent isn’t part of your household, so the exemption wouldn’t apply.
- Others point out that no law explicitly bans charging rent.
- Councils differ too. Eurobodalla Council, for example, says you can rent out a tiny home if you meet the requirements of Clause 77.
- Shellharbour Council is running a two-year trial that removes the need for a development application for eligible tiny homes on wheels used as rental accommodation. See “New South Wales councils to watch” below.
If anyone outside your immediate family will live in it, or if rent will be paid, get your council’s position in writing before you buy.
Told you don’t need approval? Check with your council first.
If a seller or builder tells you a tiny home doesn’t need council approval, check before you buy. Whether yours needs approval depends on your state’s laws, your council’s rules, your property and how you plan to use the home. Get written confirmation from your council, or advice from a town planner, before you sign a contract.
When you need council approval
Living on vacant land. If there’s no main house on the block, you need council approval to live in a tiny home on wheels. Using it instead of a house needs approval under two laws: approval to install it under the Local Government Act 1993, and development consent for the land to be used as a dwelling under the Environmental Planning and Assessment Act 1979. You can usually apply for both together, and there’s no fast-track complying development pathway for caravans.
Guests staying longer than the limits. You need council approval if a tiny home on wheels is occupied by guests for more than 2 days in a row, or for more than 60 days in total in any 12-month period.
More than one tiny home, or running it as a business. The exemptions only cover one tiny home lived in by your household, plus up to two for short guest stays within the limits above. Anything beyond that, such as a second tiny home for your household or more units for guests, needs council approval. If you plan to rent a tiny home out as holiday accommodation, check with your council first, because councils interpret the rules differently (see “What counts as a member of your household?” above).
Plumbing and wastewater. Under Section 68 of the Local Government Act 1993, you need council approval to operate a greywater system or an on-site sewage system (such as a septic tank, or a composting toilet in an unsewered area), and to connect to council water and sewer if there’s no existing connection. Some councils let a licensed plumber connect to a property’s existing internal plumbing without further approval, so check with yours.
Fixing it in place. If your tiny home is connected to services or has footings, a verandah or similar, it’s no longer covered by the exemptions, and council needs a development application (DA) to assess it.
Towing and registration
To tow a caravan or trailer on NSW roads, including a tiny home on wheels, it must be registered through Service NSW.
In NSW, a tiny home on wheels counts as a caravan only if it’s designed so it can be registered as a trailer. This comes from NSW’s moveable dwellings regulation.
Trailers up to 4.5 tonnes are light vehicles, and NSW law limits them to 2.5 metres wide. Our buying guide covers weight limits, length, electric brakes, driver licences and registration in detail.
Wider than 2.5 metres? Transport for NSW treats it as an oversize light vehicle. It says these are too large or heavy for some NSW roads. You may need a special permit, or have to travel under special conditions. Transport for NSW lists some exemptions for oversize light vehicles, but none of them mention caravans or tiny homes.
Planning a home wider than 2.5 metres? Talk to Transport for NSW and your builder about how it will be moved before you commit.
Tiny house on foundations
A tiny home on permanent foundations is legally a Class 1a building under the National Construction Code. That’s the same category as a standard house. It can be a backyard home alongside a main house, or your main house itself. Either way, you’ll need approval through one of two pathways:
- Complying Development Certificate (CDC): a fast-track approval from a private certifier or council, for homes that meet set standards.
- Development Application (DA): a full assessment by council against its local planning rules.
Backyard tiny homes (secondary dwellings)
Under the Housing SEPP, a secondary dwelling (granny flat) is a self-contained home on the same lot as a main house. To qualify for the CDC fast-track, it must be 60m² or less on an eligible block of at least 450m².
Unlike a tiny home on wheels, anyone can live in it, including family, friends or private tenants.
| Pathway | When it applies | Typical timeframe and process |
|---|---|---|
| CDC | Land of 450 m² or more in residential zones R1 to R4 with no site overlays, meeting all standard design criteria. | Fast-tracked approval, typically assessed in around 20 business days. |
| DA | Land under 450 m², zone R5, properties with heritage, flood, or high-risk bushfire overlays (BAL-40 or Flame Zone), or custom designs. | Submitted to local council; assessment usually takes between 4 to 12 weeks (or longer). |
Because flood, heritage, and severe bushfire risks vary from block to block, they require a tailored council assessment rather than a certifier checklist. That’s why high-risk planning overlays turn off the CDC fast track and require a DA instead.
Design standards for a CDC
To be approved as complying development, a granny flat must meet every standard in Schedule 1 of the Housing SEPP. The main ones are below. The schedule also covers earthworks, drainage, front setbacks and building design, so your certifier will check the full list.
- The lot: after building, it can only have one main house and one granny flat. It needs lawful access to a public road, and (except for battle-axe lots) a road frontage of at least 12m on lots of 450–900m². You don’t need to provide extra parking.
- Size: the granny flat can be up to 60m², not counting attached decks, verandahs or carports. The main house and granny flat together can’t exceed 330m² on lots of 450–600m², or 380m² on lots of 600–900m².
- Height: no more than 8.5m.
- Side and rear setbacks: on lots of 450–900m², at least 0.9m from side boundaries and 3m from the rear boundary. Both increase for any part of the building taller than 3.8m. Larger lots need bigger setbacks.
- Site coverage: on lots of 450–900m², all buildings together can cover no more than 50% of the lot.
- Landscaping: at least 20% of the lot on lots of 450–600m², or 25% on lots of 600–900m². At least half must be behind the front building line, and every landscaped area must be more than 2.5m wide.
- Outdoor space: the lot needs more than 24m² of private open space, more than 4m wide, reached directly from a living area (not a bedroom). It can be shared by both homes.
- Privacy: windows and decks that are raised and close to a side or rear boundary may need privacy screens. For example, a deck larger than 3m² within 3m of a boundary needs a screen if its floor is more than 1m above the ground.
- Trees: the granny flat must be at least 3m from any protected tree on the lot.
- Fire separation: under the National Construction Code, any wall within 1.8m of the main house, or within 900mm of a boundary, must have a fire rating (FRL) of at least 60/60/60.
- Bushfire prone land: a CDC is only possible if the granny flat meets the NSW Rural Fire Service’s Planning for Bush Fire Protection guidelines. The lot must also have direct access to a public or council road, the granny flat must be within 200m of that road, and the lot needs a water supply for firefighting (mains water, or a tank of at least 10,000 litres on lots up to 10,000m², with a 65mm metal Storz outlet). Gas installations must meet extra safety rules.
- Energy efficiency: a BASIX certificate is required.
Utilities
Under Section 68 of the Local Government Act 1993, you need council approval to:
- connect to council water and sewer, if there’s no existing connection
- operate a greywater system
- operate or modify an on-site sewage system, such as a septic tank or composting toilet in an unsewered area
- dispose of stormwater on site, if roof stormwater can’t drain to a stormwater easement or council road.
In Sydney Water’s area: a granny flat approved as complying development under the Housing SEPP doesn’t need a Section 73 Compliance Certificate. You still need Sydney Water’s building plan approval for any building or excavation work on your property.
Driveways: any work between your property boundary and the road, such as a new or widened driveway crossing, needs council approval under Section 138 of the Roads Act 1993. This is separate from your CDC or DA, which only covers work inside your property boundary.
A tiny home as your main house
A fixed tiny home can be your only home, treated like any standard house. Whether it can use a CDC or needs a DA depends on your zone, lot and the house’s design, so check with your council or a certifier before you design.
On rural land, a main house may be able to use a CDC, even though a granny flat can’t. The NSW parliamentary report on rural housing lists complying development as available in most rural zones and in zone R5 through the Codes SEPP, for example under the Rural Housing Code or the Inland Code. It isn’t available in conservation zones (C1–C4).
Rural and large-lot land
On rural land and large-lot residential land (zone R5), there’s no fast-track CDC for a secondary dwelling. Applications go to council as a full DA, and whether a granny flat is allowed at all, and how big it can be, depends on that council’s Local Environmental Plan (LEP).
| Residential zones (except R5) | Rural zones | |
|---|---|---|
| Fast-track (CDC) | Available under the Housing SEPP | Not available |
| Who approves | Private certifier or council (CDC), or council (DA) | Council only, through a full DA |
| Rules | CDC standards are the same across NSW | Set by each council’s local plan (LEP) |
| Is a granny flat allowed? | Yes, in residential zones | Only if the council’s LEP allows it |
R5 large-lot residential land also needs a full DA.
The rules change at every council boundary. Because each council’s LEP decides, two neighbouring properties in different council areas can face completely different rules.
- Councils can choose not to allow them. Secondary dwellings aren’t a use that councils must allow in rural zones, so it’s up to each council’s LEP whether they’re permitted at all.
- Lot size limits. Some councils only allow secondary dwellings on rural land above a certain lot size, so check your council’s LEP.
- Size caps. Where they’re allowed, each council’s LEP can set a maximum floor area for a rural secondary dwelling, and a maximum distance from the main house.
A rural DA can involve extra assessments. Depending on your site, council may need to assess things like:
- Bushfire. Bushfire controls apply to secondary dwellings on bushfire prone land. Your site’s Bushfire Attack Level (BAL) may need to be assessed by a qualified bushfire consultant, the building must meet the Building Code of Australia’s construction requirements for bushfire areas, and the site needs suitable access for firefighting, designed to the NSW Rural Fire Service’s Planning for Bush Fire Protection guidelines.
- Wastewater. If the property isn’t connected to town sewer, it relies on an on-site sewage system such as a septic tank. Adding a granny flat may mean modifying that system, and operating or modifying an on-site sewage system needs Section 68 approval (see “Utilities” above).
- Developer contributions. Some councils charge infrastructure contributions on a secondary dwelling, while others don’t. Clarence Valley and Richmond Valley councils, for example, levy no developer contributions on secondary dwellings, and Ballina Council waives part or all of its contributions. Check your council’s contributions plan before you budget.
Prefer to stay on wheels? On rural land, a tiny home on wheels can be installed without council approval if it’s for your household and there’s already a house on the property, or if it houses seasonal farm workers on pastoral or agricultural land. You may still need development consent to use it in some circumstances. See “How the household exemption works” above.
What’s changing: rural housing reform
Updated October 2026. This is moving quickly, so check back.
Granny flats on rural land face more hurdles than in suburban areas: the fast-track CDC is only available in certain residential zones, and rural applications depend on each council’s LEP. A NSW parliamentary committee has examined reforms to make it easier to build second dwellings in rural zones.
The NSW Parliamentary Committee’s inquiry into rural housing and second dwellings reform, chaired by John Ruddick, tabled its final report in March 2026. Its six recommendations include:
- allowing secondary dwellings and dual occupancies as complying development (the CDC fast-track) in zones R5, RU1, RU2 and RU4–RU6
- removing the requirement for a second dwelling to be attached to the main house, and removing or increasing size limits
- giving councils a toolkit to permit secondary dwellings in more zones
- amending Clause 77 so the tiny home on wheels exemption also covers someone experiencing homelessness
- an amnesty for existing unauthorised dwellings that would be allowed under new rules.
What this means for you right now: these are recommendations, not law. Until the government changes the rules, the rural rules above still apply.
New South Wales councils to watch
- Shellharbour: runs a two-year trial that lets eligible tiny homes on wheels be rented out as long-term accommodation without a development application. The homes must be built on trailers and registrable as a vehicle, and there’s a maximum of one per property, alongside an existing house. Instead of a DA, they’re approved under the council’s Local Approvals Policy (a Section 68 approval). Council will review the results toward the end of the trial and decide whether to continue, change or end it.
- Eurobodalla: has a dedicated tiny homes page that answers common questions separately for tiny homes on wheels and fixed tiny homes. Notably, it says you can holiday let or rent out a tiny home on wheels if you meet the requirements of Clause 77, a more open position than many readers expect.
- Byron Shire: has a dedicated tiny homes page confirming that a tiny home on wheels which complies with Clause 77 doesn’t need approval, including one lived in long term by a household member where there’s already an approved house. Byron also has one of the tightest short-term rental limits in NSW: non-hosted short-term rentals are capped at 60 days a year across most of the shire.
- Lismore: offers a one-off $15,000 Housing Grant for new housing, including secondary dwellings (granny flats). It’s paid once the home is complete and an Occupation Certificate is issued. The grant also covers flood-affected homes being relocated within the area. Check with council that grants are still available before you apply.
FAQs
Can I rent out my tiny home to a long-term tenant?
Tiny home on wheels: it depends on how your council interprets “member of your household.” Some councils say you can rent it out if you meet Clause 77, and Shellharbour is trialling a pathway to rent one out without a DA. See “What counts as a member of your household?” above, and check with your council before you rent it out.
Fixed backyard tiny home (granny flat): check with your council about any conditions on your approval. A granny flat must stay on the same title as the main house.
Can I use my tiny home as a short-term holiday rental (Airbnb)?
Tiny home on wheels: it depends on your council. Eurobodalla Council, for example, says you can holiday let a tiny home if you meet the requirements of Clause 77, but councils interpret the rules differently, so check with yours first.
Fixed backyard tiny home (granny flat): renting out a granny flat while you live in the main house generally counts as “non-hosted” short-term rental accommodation. In Greater Sydney (not including the Central Coast) and some regional council areas, non-hosted short-term rentals are limited to 180 days a year. In most of Byron Shire, the limit is 60 days. Elsewhere in NSW, there’s no day limit.
Will adding a tiny home increase my council rates and land tax?
Check with your council about rates, and with Revenue NSW about land tax. Land tax rules for a home with a rented granny flat can be complex, and Revenue NSW updated its eligibility criteria for the principal place of residence exemption from the 2026 land tax year.
Can I go off-grid, use a composting toilet, or connect to services?
Being off-grid doesn’t get around the approval rules. In NSW, operating a greywater system or an on-site sewage system, such as a septic tank or composting toilet in an unsewered area, needs council approval under Section 68 of the Local Government Act 1993. Check with your council’s environmental health officer before you install anything.
Common myth:
Being fully off grid doesn’t bypass council rules. Planning controls how land is used, while health laws treat all sink and shower run-off as sewage. Draining untreated greywater onto the ground can trigger council fines.
Before installing any dry toilet or off-grid drain, review NSW Health wastewater management standards and verify permit requirements with your local council environmental health officer.
Can I subdivide my land or sell the tiny home separately later?
Fixed backyard tiny home (granny flat): no. A granny flat can’t be subdivided from the main house. It must stay on the same title, so the two can only be sold together. A granny flat also doesn’t need its own driveway or separate services.
Is NSW changing the rules for second homes on rural land?
See “What’s changing: rural housing reform” above for the latest on the NSW parliamentary inquiry into rural housing and second dwellings.
Comparing states? See how every state’s rules stack up in our state-by-state comparison.