Previous investigations into the factors associated with house loss in wildfires have focused on the house construction and its immediate environment (e.g. gardens). Here, we examine how nearby native forest and other houses can influence house loss. Specifically, we used a sample of 3500 houses affected by the Victorian bushfires of February 7th 2009 to explore how the amount of forest, proportion of forest burned by crown fire and the number of nearby houses affected house loss and how far from the house this influence was exerted. These fires were the most destructive in Australian history and so represent the extreme of fire risk. Using generalized linear modeling we found that the probability of house loss increased with forest extent and the proportion burnt by crown fire and this relationship was strongest for forest measured 1 km from the houses. Houses were more likely to be destroyed if there were other houses within 50 m and if they were on a slope. A model containing these variables predicted house loss with 72% accuracy. Our findings have three important implications: i) management to change the occurrence of crown fire will be effective in reducing house loss; ii) this management may be required up to 1 km away from houses in some situations (a much larger zone than is currently used); iii) high density of houses may increase risk of loss. Given the potentially large width of this management zone and the hazard from nearby houses, it may be more sensible to concentrate on modification of buildings to reduce their vulnerability.