Every argument about tiny homes gets treated as a fight about where people should be allowed to live. It is really about a box the law never built.
When the Land and Environment Court dealt with a tiny home on the far south coast this month, it opened with an observation that should have been the story. Tiny home, the commissioner wrote, is an increasingly popular name for something used for residential accommodation that does not benefit from any planning or other statutory definition.
The New South Wales planning department made the same point in July, in a practice note on installing prefabricated homes. Prefabricated home, it says plainly, is not a term defined or used in the planning Act, the Local Government Act, or the regulations under either.
Two categories of housing being marketed hard to Australians right now have no name in the law. Everything that follows comes from that.
The same factory can turn out two homes that live in different legal universes
Take the two products that practice note does cover, because the contrast is genuinely absurd once you see it laid out. Both are built off site. Both arrive on a truck. Both are exactly what buyers are actually asking for at the affordable end of the market.
A manufactured home, meaning a self contained dwelling built in one or more major sections and not registrable as a vehicle, is not a building under the planning Act. So there is no construction certificate. No principal certifying authority. No occupation certificate before anyone moves in. No BASIX certificate. Instead the regulation asks for a design certified by a practising structural engineer, installation to that certificate, and compliance plates attached.
A flat pack kit home, meaning the same house arriving as parts rather than major sections, is a building. So it needs development consent and a construction certificate, a principal certifying authority, critical stage inspections, an occupation certificate before occupation, and a BASIX certificate. It needs no activity approval under the Local Government Act at all.
Same buyer. Similar money. Similar house. Two entirely different sets of obligations, decided by how the thing was packed for transport.
A home on a registrable trailer falls through both
Now add the third product. A dwelling built on a trailer that can be registered as a vehicle.
It is not a building, because the planning Act excludes moveable dwellings from that definition. So no part of the building approval system reaches it.
It is not a relocatable home either. The moveable dwellings regulation defines a relocatable home as a manufactured home or other moveable dwelling other than a tent, caravan, campervan or vehicle capable of being registered. The design and construction specifications in that regulation attach to manufactured homes and relocatable homes. A caravan is written out of both by definition.
So what standard governs the construction of a house someone will live in for a decade? Road transport law. Mass, dimensions, and a plate confirming the trailer can carry what sits on it.
Three factory built homes, three different rulebooks
A manufactured home is not a building. It needs an activity approval under the Local Government Act, a structural engineer certificate and compliance plates, and development consent for the use of the land. A flat pack kit home is a building. It needs development consent, a construction certificate, a certifier, inspections, an occupation certificate and a BASIX certificate. A dwelling on a registrable trailer is neither. No building approval system applies to it, no construction specification in the moveable dwellings regulation applies to it, and development consent for the use of the land is still required.
The consumer protection gap is the part nobody argues about
The planning argument gets all the oxygen. The consumer one is worse.
The Home Building Act expressly includes a transportable house in the definition of a dwelling. It just as expressly excludes a moveable dwelling that is, or is capable of being, a registered vehicle. A caravan or a motor home is named as the example.
Read the consequence. Somebody spends well into six figures on what the brochure calls a home, and the statutory warranties, the compensation cover and the licensing regime that would attach to the identical house on a slab do not follow the purchase. They bought a home and received the consumer protections of a trailer.
They bought a home and received the consumer protections of a trailer.
Plenty of operators in this space build to code principles because they think it is right, not because anyone makes them. Others do not, and nothing in the structure distinguishes the two at the point of sale. Any builder who has worked through a set of licensing and compliance obligations knows what that asymmetry is worth in a quote.
This is not builders being precious about turf
It would be easy to read that as an industry protecting its patch. It is not the argument.
A licensed builder putting a secondary dwelling in a backyard carries insurance, warranties, certification, energy compliance and a defects liability period. Every one of those costs money and every one of them is priced into the job. A wheeled unit competing for the same customer carries none of them. That is not competition on build quality and construction standards, it is a price advantage handed out by a definition.
And when one of those dwellings fails, structurally or through wastewater or fire, the phrase in the reporting will not be moveable dwelling. It will be tiny home, and the damage will land on everyone who builds small homes for a living.
Councils are improvising because the states have not decided
Shellharbour opened a two year trial on 7 September that removes the need for a development application for certain mobile tiny homes used as rental accommodation. It is a genuine attempt at a pathway and other councils are watching it.
Look at what it took. A planning proposal to amend the local environmental plan, and a separate local approvals policy. Two instruments, because there are two systems, and a council that wants to allow one small dwelling has to reach into both.
Even then, the trial answers the approval question and not the construction one. Nothing in it creates a standard the dwelling has to be built to. That is not a criticism of the council. It is the limit of what a council can do with the categories it has been handed.
The reform money is going to the other box
Meanwhile the national work is moving past this entirely. The Australian Building Codes Board has been tasked with delivering a national voluntary certification scheme for manufacturers of prefabricated construction, expected around the middle of 2028, alongside nationally consistent definitions in the building code. It is sensible work. It is aimed squarely at factory built products that are buildings.
New South Wales has gone further and legislated. Its prefabricated building framework states in terms that a moveable dwelling is not a prefabricated building.
So the country is building a certification system for factory homes, and writing the ones on wheels out of it, at the exact moment demand for them is climbing. That is a choice, even if nobody experiences it as one.
What a third category would actually have to do
The fix is not to let people live anywhere they like. Consent for the use of land is not the problem and it should stay. Councils need to know what is on a block, and neighbours and emergency services have a legitimate interest in that.
The problem is that there is no defined standard for the thing itself. A workable category would name the product in legislation, set a construction standard fit for a dwelling that gets towed and then lived in permanently, certify it once at manufacture where the evidence exists, attach consumer protections to the dwelling rather than the chassis, and give councils a siting pathway that is a decision rather than a guess.
None of that is exotic. Most of it already exists for manufactured homes, whose design must be certified by a structural engineer and which carry compliance plates. The bones of the answer have been sitting in the caravan park framework for decades.
The judgment on the far south coast was never really about a couple and a council. It was about which of two boxes a home belonged in, decided by a court that has no power to build a third. Building the third one is Parliament work, in every state, and so far nobody has done it.
Frequently asked questions
Not as a dwelling. The building code applies to buildings, and a moveable dwelling is excluded from the definition of a building under the Environmental Planning and Assessment Act 1979 in New South Wales. A home built on a registrable trailer is regulated as a vehicle for road purposes, and the design and construction specifications in the moveable dwellings regulation apply to manufactured and relocatable homes rather than caravans.
No. The Home Building Act 1989 includes a transportable house in the definition of a dwelling but expressly excludes a moveable dwelling that is, or is capable of being, a registered vehicle, using a caravan or motor home as the example. The warranty and insurance regime that attaches to residential building work does not follow that purchase.
A manufactured home is a self contained dwelling built in one or more major sections and not registrable as a vehicle. It is not a building under the planning Act, so it is approved as an activity under the Local Government Act with engineer certification and compliance plates. A flat pack kit home arrives as parts rather than major sections, is treated as a building, and needs development consent, a construction certificate, a certifier and an occupation certificate.
Yes, for buildings. The Australian Building Codes Board is developing a national voluntary certification scheme for manufacturers of prefabricated construction, expected to be available around the middle of 2028, together with nationally consistent definitions in the building code. Dwellings that are registrable vehicles sit outside that work.
Related reading
- NSW Passes New Building Act 2026: construction certificates are on the way out
- Modular, container, tiny home, duplex: the shift in what Australians want to build
- Construction Licensing and Compliance in Australia
Last updated: 14 September 2026.
General information only. This article is general industry commentary and reflects the view of The Good Builder editorial team. It does not constitute legal, financial or regulatory advice. Builders and construction professionals should seek independent professional advice about how planning and building legislation applies to their circumstances.
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