The Somerset Co-operative Community Land Trust is planning to turn 10 East Reach, previously a bank and a hairdresser, into a “social housing and community workspace”.
The trust says the building could provide two studio flats, two larger flats and work space on the ground floor.
It says since 2006 the number of households in Somerset on the housing waiting list has risen from 2,211 to 5,221, and projects such as this will offer more options to people seeking housing.
Alex Lawrie, the trust’s business development manager, said: “The house we’ve chosen in Taunton is the first of our trust’s houses within a town.
“The housing situation in the area is growing fast and prices aren’t moving.
“We have £45,000 in community shares and our target is £220,000, but it’s one of those things where buying the property is the easy bit and we need to renovate.
“We need the community to help us step it up a gear.”