'Like a light switch turning on': Inside Tasmania's big play on removing stamp duty

The Tasmanian Government’s stamping out stamp duty policy has seen those who purchased a home for $750,000 or less after February 2024 and those planning to buy before the end of June 2026 get full stamp duty relief, effectively saving them up to $30,000.

Last month, Tasmania’s minister for finance, Roger Jaensch, has revealed nearly 1700 households purchased their first home without paying stamp duty under the state government policy in 2024.

Mr Jaensch said the policy is a key part in the 2030 Strong Plan for Tasmania and has been instrumental in making homeownership a reality for thousands of Tasmanians.

“We said we would stamp out stamp duty, and we have. Since February 2024, almost 1700 Tasmanian households have saved an average of $18,400,” Minister Jaensch said.

“This scheme provides households with a saving of up to $28,935, which is making a real impact on the affordability of a first home.

“That kind of money can literally make the difference between being able to buy a first home or not - particularly given the need for a large upfront cash deposit when buying a house.”

Each month since the scheme’s inception has seen approximately 150 Tasmanian households cash in on the exemption, with 454 homebuyers in the north, 385 in the north west, and 846 in the south of the Apple Isle.

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Mr Jaensch continued: “An important part of our 2030 Strong Plan for Tasmania's future is to help more Tasmanians realise their home ownership dream, which is exactly what we’re doing here.”

Tasmania’s market on the move

According to PropTrack’s December Home Price Index, Hobart was one of only two capital cities where home prices rose in the last month of 2024, albeit only a modest move of 0.03%.

The capital’s median now sits at $865,000 after a 1.59%annual increase. However, Hobart’s values have surged 40.2 per cent since March 2020.

While Hobart’s median sits more than $100,000 above the first-home buyer stamp duty exemption cap, homeownership in the rest of the state is more accessible.

Homes outside the capital only shifted 0.10% in December to $515,000 and are 3.5% higher than 12 months ago. The rest of state median has skyrocketed 57.8% since March 2020.

REA Group senior economist Anne Flaherty said the December data showed just how much short-term price trends differed from a longer-term view of the market.

REA Group senior economist Anne Flaherty says that Hobart's historically weak performance has not stopped it rising up the price ranks. Picture: supplied

“Arguably, the last four years have had the most diverse property conditions that we’ve seen across the country,” she said.

“Hobart has been one of the weakest performing cities over the past year, but if we look at that average annual change, it’s actually seen the strongest growth.”

First-home buyers back in business

The state government’s move to wipe out stamp duty for first-time buyers purchasing under the $750,000 threshold has switched the demand tap from cold to hot, said Launceston-based Peter Rees selling agent Jamie Beaton.

“It's been such a good carrot. It was almost like a light switch turning on. Beforehand, you'd have five people through an open home around that price, then after the announcement, you'd have 25 people through,” he said.

“As soon as it tips over $750,000, to say $760,000, it is a bit quieter. When you think about it, those first-home buyers aren’t just paying $10,000 more; they’re spending over $50,000 more when you include the stamp duty.”

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Mr Beaton said the stamp duty exemption threshold may be firing up the lower end of the market, but the demand is tricking up.

“Indirectly, it does also help the top end because somebody needs to sell a home under $750,000 to be in the position to buy a $1 million house. You're still finding that wall at $750,000 for first-home buyers for obvious reasons, but everything up to that figure has really picked up steam.”

The year ahead for first-time purchasers

With a June 2026 deadline on the stamp duty stamp out, Mr Beaton said plenty of potential first-home buyers already have a new address on their bucket list for 2025.

“Speaking to mortgage brokers, there are a lot of first-home buyers getting ready and sorting out their pre-approvals right now. I feel there are going to be even more buyers out even within the next 30 days.

"They’re in that mindset that now there's definitely not going to be another rate increase, in fact there’ll probably be a rate decrease in a short amount of time.”

Launceston-based Mortgage Choice broker Peter Reynolds agreed that the state government’s move had spurred many purchasers into action.

Mortgage Choice broker Peter Reynolds says he expects to help significantly more first home buyers than usual. Picture: Mortgage Choice

“We've definitely seen an increase in the number of inquiries and actual applications. I fully expect throughout 2025, and probably into 2026, we'll be helping more first-home buyers than usual,” he told Mortgage Choice.

“It's genuinely been great because it literally reduces the amount of deposit they need. Before the change, Tassie first-home buyers did get half the stamp duty off, but that was only up to $600,000.”

Mr Reynolds said while the free pass on stamp duty is a financial windfall, realistically it is a band aid over the sting of losing the mortgage momentum a coupe of years ago.

“From the time the Reserve Bank started rising rates from May 2022 through to late 2023, everybody lost around about 30% of their borrowing capacity. If, prior to May 2022, they could have theoretically borrowed $1 million, they’ve now down to $700,000,” he explained.

“So now we’ve been seeing what’s already a national trend; that first-home buyers are using their parents to either go guarantor or gift them money for the deposit.

"It wasn’t that common, but the bank of mum and dad is now alive and well in Tassie.”