When having to go means facing $25,000 legal fight: Tiny house battle could change housing rules

Josh Heins and his partner Manu Bohn thought they'd found the perfect solution to Australia's brutal housing crisis. Build a tiny house, park it on a mate's farm, save money, and eventually buy their own place. It's the kind of resourceful thinking that used to be called 'having a go.'

Instead, they're now facing a potential $25,000 legal bill and the threat of a $1 million fine - all for trying to put a roof over their heads during the worst housing crisis in generations.

The NSW couple's David and Goliath battle with Bega Valley Shire Council has become a flashpoint in the national debate over housing solutions, highlighting just how desperate things have become for ordinary Australians trying to secure affordable homes.

A housing crisis hitting home

The numbers paint a stark picture: home prices rose by 4.9 per cent in 2024, while rents increased by 4.8 per cent in 2024 and 1.7 per cent in early 2025. Households with a new mortgage now spend 50 per cent of their income on housing, while tenants spend 33 per cent of their household incomes on rent.

For many older Australians on fixed incomes, these figures represent an impossible equation. In the ten years to March 2025, median advertised rents in Australia jumped by almost 50 per cent and 1.26 million low-income households were in financial housing stress in 2024-25. Little wonder that people are looking for creative solutions.

Josh and Manu's story began two years ago when they moved their 12-square-metre home on wheels to a friend's property in Coolagolite, near the NSW south coast. They believed their structure qualified as a caravan under NSW regulations, meaning no council approval was needed. For two years, they lived quietly, contributing to the farm work in exchange for their small corner of land.

Then in April, everything changed. They were slapped with a draft order to remove or demolish the home in accordance with NSW Environmental Planning legislation in May 2025. Failure to comply would result in legal proceedings and up to $1 million in fines.

The legal battleground

The matter has now been escalated to the Land and Environment Court of NSW, where Heins has been told even 'simple' cases can cost up to $25,000 to resolve. 'Once a council have issued compliance orders, the only way to challenge [it] is to make an appeal to the court, which is obviously a huge rigmarole,' he said.

But there's hope in legal precedent. In 2018, a Sydney family successfully challenged Camden Council in a landmark case that could provide crucial support for Josh and Manu's position.

The homeowners won the case against the Land and Environment Court, as the 'mobile structure' was a caravan, not a temporary structure, thereby classifying it as a moveable dwelling that was capable of being used for human habitation in conjunction with the main dwelling. As the family won the case, this set a precedent for all caravans from then on.

The regulatory maze

Part of the problem lies in the complex web of regulations governing tiny houses across Australia. Some councils now recognise them as legitimate dwellings, while others classify them as caravans. Recent policy changes in states like Western Australia and Victoria show a trend towards greater acceptance of tiny homes as a housing option.

The rules vary dramatically:

• In Australia, your tiny house must be under 2.5m wide, 4.3m high and 12.5m long. They must also be no more than 4.5 tonnes.
  
• In most states, legislation limits stays to two consecutive days, and less than 60 days per year.
  
• In Western Australia, as of September 1, 2024, residents can now live in tiny homes on private property for up to two years with council approval.

Alternative housing solutions for older Australians

For seniors facing housing stress, tiny houses represent just one option in a growing array of alternative housing solutions. Understanding these options could be crucial as traditional housing becomes increasingly unaffordable.

Granny flats and secondary dwellings

Gone are the days when Granny Flats were reserved for housing elderly family members. Now they are considered secondary dwelling units — self-contained one-to-two bedroom / one bathroom dwellings of at least 60 square metres internally, fit for anyone looking for their own space.

As a registrable caravan, for most properties, your VanHome can be easily added as a second dwelling without the need for council building approvals. Whether you want to secure a plan for retirement, extend the family home with a granny flat or enjoy a holiday home, find out how a transportable home can help.

Residential parks and villages

Residential parks may be co-located within caravan parks or purpose-built and referred to as a residential village, lifestyle village or manufactured home. They have evolved from caravan parks and cater specifically to older people. Looking like retirement villages, they may have facilities like a community centre, bowling green, libraries and even a mini-cinema, although this will vary from village to village.

Community support and the push for change

Josh and Manu started a Change.org petition demanding a moratorium on tiny house evictions in NSW until a clear, safe, and legal pathway for tiny home-ownership is established, which attracted almost 30,000 signatures. Bega Valley Shire Council voted on the petition, with Heins gathering supporters at the council office to show the petition 'isn't just a piece of paper' but a demand for compassion in the housing crisis.

The petition reflects broader community frustration with housing policy. As Heins argues, 'Council keeps saying that they need more clarity from the state government. We're saying to them, while we're all waiting for that clarity, how about you don't pursue any compliance orders that would leave residents without a home.'

What this means for older Australians

For seniors watching this case unfold, several important considerations emerge:

Legal precedent matters: The 2018 Russell v Camden decision provides hope that properly registered tiny houses on wheels may have legal protection under caravan regulations.

Alternative planning is essential: With housing costs continuing to outpace pension increases, having backup housing plans becomes increasingly important.

Community support exists: The strong petition response shows significant community backing for alternative housing solutions during the crisis.

The broader implications

Council Director Emily Harrison said Council is advocating to the NSW Government to simplify and modernise the legislative framework around moveable dwellings. 'While the NSW Government has indicated that modernising current legislation is no longer a priority, we remain committed to advocating for change.'

This tension between immediate housing needs and regulatory frameworks reflects a broader challenge across Australia. The State of the Housing System 2025 report estimates that 938,000 homes will be built during the 5-year National Housing Accord period, which ends in mid-2029 – 262,000 homes short of the 1.2 million target.

For older Australians, particularly those on fixed incomes, these shortfalls represent more than statistics – they represent potential homelessness or housing stress that can seriously impact health and wellbeing.