Tiny House, Granny Flat or Bed and Breakfast

There are state-wide and local regulations that govern the use of Tiny Homes, and non-compliance can result in enforcement action.

While some planning exemptions exist for small second dwellings, there do not automatically apply to Tiny Homes. Unfortunately, many online resources fail to disclose the necessity to have appropriate council permissions.

This is particularly relevant for Yarra Ranges, where there are many properties with planning overlays including bushfire management, environmental significance, erosion management and land subject to inundation overlays.

If you are considering a Tiny Home in Yarra Ranges, please contact Council’s Planning Team on 1300 368 333.

A building permit may not be required if your Tiny House remains on wheels, is fully moveable, and does not include any external features or isn't connected to services and infrastructure.

You will need a building permit if your Tiny House includes external features such as decks, awnings, or is connected to services and infrastructure.

It is strongly recommended that you consult a private building surveyor to confirm whether a permit is required for your specific situation.

Please note: Even if a building permit is not required, you must still comply with the planning requirements applicable to the land.

The Victorian Building Authority website provides information on how to appoint a surveyor as well as a register of building practitioners to contact.

The land use term and definition for ‘dependent person’s unit’ was removed from the Victoria planning provisions and all planning schemes by Amendment VC253.

Previously a DPU was defined as 'A movable building on the same lot as an existing dwelling and used to provide accommodation for a person dependent on a resident of the existing dwelling.'

On 3 March 2025, Amendment VC266 made further changes to the Victoria planning provisions and all planning schemes to expand the transitional arrangements until 28 March 2026. Therefore, proposals for dependent person’s units can continue to be lodged up until 28 March 2026.

 To meet the definition of a DPU, the building therefore must be:

• moveable, meaning capable of 'designed to be moved from place to place on more than one occasion'. The building may be moveable from a modular design or small size which fits on the back of a truck
• to provide accommodation only for a person(s) dependent on you. This may be your elderly parents or vulnerable person that is dependent on you.

If the criteria are not met, it is considered a second dwelling and will require a planning permit (Note: In a Green Wedge Zone and Rural Conservation Zone a second dwelling is prohibited).

In most cases under the Yarra Ranges Planning Scheme (except for the Rural Conservation and Green Wedge Zones), a planning permit may not be required for a DPU, provided it is the only DPU on the lot. Note, if your land is located in the Industrial 1 and 2; and Commercial 2 Zone, a DPU is prohibited.

If your land contains Overlays (e.g. a Land Subject to Inundation Overlay, Bushfire Management Overlay or Vegetation Protection Overlay) a Planning Permit may still be required.

Any application for a dependent persons unit that requires a planning permit under the transitional provisions in the planning scheme at Clause 52.04 (Transitional provisions for a dependent person’s unit) must be decided by Council before 28 March 2026.

Any proposals for dependent person's unit not approved by this date or lodged after this date will not comply with the planning scheme and would be required to be amended to meet the planning scheme definition of a small second dwelling.

Existing, lawful dependent person’s units will remain lawful. They will not need to meet the requirements for a small second dwelling unless the building is being used as a small second dwelling.

Due to these transitional provisions having an expiry date of 28 March 2025, any application for a dependent persons unit must be accompanied by all required plans and reports to facilitate the application assessment.

Any proposals for dependent person’s unit not approved by this date or lodged after this date will not comply with the planning scheme and would be required to be amended to meet the planning scheme definition of a small second dwelling.

Subject to the requirements in the relevant planning scheme, a proposal for a dependent person’s unit may not be able to progress after 28 March 2025.

If the tiny house is not considered to be a self-contained dwelling (i.e. self-contained and contains kitchen sink, food preparation facilities, a bath or shower, and a toilet and wash basin) it may be defined as an outbuilding, an additional bedroom for friends and family or as a Bed and Breakfast.

In most circumstances this would not typically require a planning permit.

You may also need a building permit for habitual use. You can check our Do I need a building permit? page for more information.

It is recommended that you contact council about your proposal to ensure the permit requirements can be confirmed.

The common meaning of ‘bed and breakfast’ is different to the definition of a bed and breakfast within the Planning Scheme. A bed and breakfast is defined as:

‘A dwelling used, by a resident of the dwelling, to provide accommodation for persons away from their normal place of residence’.

To be classified as a bed and breakfast:

• There must be an existing dwelling
• The dwelling must have a resident, i.e. you live in the dwelling and rent out a back bedroom or habitable room to a person on holidays.
• Must not be defined a separate or additional dwelling that (i.e. fully self-contained).

Provided the definition is met, a planning permit is not required in most zones to use the land for a bed and breakfast.

As there are exceptions to, you are encouraged to contact council about your proposal to ensure the permit requirements can be confirmed.

Furthermore, a separate council permit may be required for Short Stay Accommodation under The Public Health and Wellbeing Act 2008.

Following a hearing in March 2025, the Building Appeals Board (BAB) released its decision on Friday 18 July, that in this case, the tiny home is on wheels, can be moved and is a registerable vehicle (caravan) therefore it is not classified as a building as defined in the Building Act 1993.  

While we understand that some people may view the requirements as onerous, housing development must also be balanced with achieving the existing and preferred local Neighbourhood Character to ensure developments provide a positive response to its local neighbourhood, including planting of canopy trees, landscaping and open spaces. This continues to be a key theme we heard from the community during our engagement on the now adopted Housing Strategy 2024.

Council is not waiting until the next election to review our planning scheme.

The adopted Housing Strategy 2024 outlines how Yarra Ranges will enable an increase of approximately 10,700 new homes over the next 15 years. This will include providing more housing in established residential areas and major activity centres. The strategy also includes the provision of more affordable and smaller homes, and a variety in housing size and type. 

Developers are encouraged to use Council’s multi-unit residential guidelines as guidance for preferred unit outcomes in our urban areas.

Council recognises the severity of the housing crisis and the growing interest in alternative housing options such as tiny homes, caravans, and mobile dwellings. We understand their potential to provide more affordable accommodation in Yarra Ranges and beyond.

The Yarra Ranges Neighbourhood Amenity Local Law 2020 does not prohibit the occupation of caravans on private property. It does prohibit occupants of caravans on private land from being a nuisance. However, it is subordinate legislation to planning and building legislation. Simply put that means the planning and building legislation overrides the amenity of local law.

Current Victorian planning and building legislation does not allow these structures to be used as permanent dwellings unless they meet strict requirements - typically needing both a building permit and, in many cases, a planning permit. There is no legal definition of “temporary” use in either the planning or building regulations, meaning any structure used as a home is subject to these laws.

This is a challenge across Victoria.  Council has been actively advocating for the State Government to take the lead to address this. We recently submitted and passed Motion 30 at the MAV State Conference, calling for the State Government to clarify legislation around tiny homes and similar options as legal alternate solutions in the right areas with the appropriate services. We’ve also written to the State Building Surveyor and Minister for Planning, urging each department to consider changes that would allow these housing types to be legally used as permanent dwellings in appropriate circumstances. Whilst we will continue this advocacy, we are also exploring whether there is any other option in the absence of the State changing the planning and building controls.

Until State legislation changes, Council is unable to permit these structures as homes unless they comply with current legislation and regulations, and there is no immediate alternative to legislative reform.

We remain committed to advocating for more flexible and affordable housing solutions.

Since your petition, officers have been exploring how best to address the matters that you have raised, including reviewing what other Councils have been doing and how or if this could be applied in Yarra Ranges.  While one option is to consider the adoption of a specific policy, another alternative to be explored is the provide for this in the Local Law.

Yarra Ranges Local Law currently does not prohibit or control the use of caravans on Council land, however legislative Planning and Building requirements still must be met.

We are aware that some Councils have used Local Laws as an enabler to support residents occupying temporary accommodation on private property, either with or without a permit.

While the Neighbourhood Amenity Local Law still has five years to run, Council is proposing to review the Local Law within the next 12 months and will be engaging with the community to determine what, if any, changes are needed to the Local Law, including with respect to temporary accommodation.

We would encourage everyone to stay engaged with Council’s engagement platform found via Council's website for this project.