With housing prices on the rise, more individuals are contemplating the idea of purchasing a tiny home for either permanent residence or as a holiday getaway.

The tiny house movement has gained momentum over the years, yet legal frameworks have not kept pace, causing confusion about what is permissible.

If you’re considering embracing the tiny home lifestyle, here are several key considerations to keep in mind before making a purchase.

Why people buy tiny homes

• The price factor – Tiny homes come in a wide range of prices depending on their design and materials. DIY kits for simple designs can start as low as $10,000 to $20,000, whereas custom-built tiny homes can cost up to around $200,000 or more.
• Environmental factors – If the idea of simplifying your lifestyle and minimising your environmental impact resonates with you, a tiny home could be a perfect fit. You might even explore the option of living off-grid, utilising amenities like a rainwater tank, solar panels, and a compost toilet, for example.
• Reduced expenses – Living in a tiny home can significantly reduce ongoing expenses such as water and electricity, which is advantageous in today’s economic climate.
• Flexibility – Tiny homes offer a unique lifestyle, providing the freedom to relocate in the future, especially if your tiny house is built on wheels.
• For investment purposes – Some people choose to rent out their tiny houses as a way to generate additional income streams.

What are the regulations?

Navigating regulations around tiny houses can be complex and varies significantly by location. Many councils lack clear guidelines specifically for tiny houses, complicating matters for prospective owners.

There are generally two types of tiny homes: those built on a foundation and those on a trailer with wheels.

Tiny houses on a foundation are typically treated as permanent dwellings and require council approval and building permits, similar to conventional buildings.

To circumvent these regulatory challenges, many people opt to keep their tiny homes on wheels. Councils often categorise these homes similarly to caravans, which can simplify regulatory compliance. However, it’s important to note that the trailers on which tiny houses are constructed must also meet specific standards set by local authorities.

In many states, there are restrictions on the duration for which you can permanently reside in tiny homes on private land. However, some councils are beginning to relax these rules in response to growing interest in tiny house living.

Bottom line: Before purchasing a tiny house, it’s crucial to contact your state or territory government and local council to understand the latest regulations that apply to you. Additionally, you’ll need to research the maximum size limits allowed for your tiny home.

You can find more information, including local laws and state regulations, on the Australian Tiny House Association website.

What about finance?

If you choose a tiny home on wheels (legally classified as a caravan), traditional home loan applications may not be applicable. However, this doesn’t mean your dream of owning a tiny home is impossible.

We can explore alternative financing options such as personal loans or leveraging existing equity to fund your build. Additionally, if you need financing for purchasing land to park your tiny home on or for the vehicle to tow it, we can assist with those options too.

If you’re intrigued by the idea of joining the tiny home movement, reach out to your 1st Street Mortgage Broker and let’s start exploring your possibilities. Together, we can set your plans in motion.

* All information is intended to be a guide only and should not be considered legal advice. It’s always best to contact your state and local councils before purchasing a tiny house.