In a move that has left many first-home buyers in Tasmania reeling, the Tasmanian government has announced significant changes to its housing policy, impacting the financial incentives available to new entrants in the property market. The 2026 state budget, unveiled recently, revealed that the temporary boost to the state’s First Home Owners Grant (FHOG) will not be extended, and a key stamp duty exemption is set to expire.

The First Home Owners Grant, which was temporarily increased from $10,000 to $30,000 in 2021, will be reduced to $20,000 starting 1 July this year. While this is still higher than the pre-boost amount, it falls short of last year’s offering by $10,000. Treasurer Eric Abetz emphasised the significance of the grant, stating, “Owning your first home is a major milestone, and the grant will make a real difference for Tasmanians trying to enter the market.”

The decision comes despite recent data from the Australian Bureau of Statistics indicating that Tasmania and New South Wales were the only states to see an increase in the pipeline of new home approvals in March. The reduction in the grant has raised concerns among industry stakeholders about its impact on the housing market.

Benjamin Price, executive director for Tasmania at the Housing Industry Association, highlighted the importance of the grant in fostering market confidence. “The temporary $30,000 grant has helped many Tasmanians bring forward decisions to build, and that support has mattered during a tough period for affordability,” he said. Price further stressed, “What’s important now is certainty, and setting the grant at $20,000, rather than allowing it to fall back to $10,000.”

In addition to the changes in the First Home Owners Grant, the state government has confirmed that the stamp duty relief on established homes will not be extended beyond June. While first-home buyers purchasing or building new homes can still benefit from a full exemption, those opting for existing properties will face the regular stamp duty rates from the new financial year.

This development follows the 2024 decision by the Tasmanian government to abolish stamp duty for properties valued under $750,000. Eligible first-home buyers had been able to save up to $28,945 in stamp duty fees on homes purchased between February 2024 and June 2026, provided they lived in their home for six months within the first year of ownership.

The expiration of the stamp duty concession is expected to have a significant impact on first-home buyers in Tasmania, particularly as home prices in the state continue to rise. According to the PropTrack Home Price Index, median prices in Hobart have increased by 10.5% in the 12 months leading up to April, making Hobart the second most affordable capital in Australia, behind Darwin. Currently, the median value of a home in Hobart stands at $728,000, while the rest of Tasmania has a median price of $572,000.

First-home buyers in Tasmania are now faced with the prospect of navigating a more challenging financial landscape as they enter the property market. The reduction in the First Home Owners Grant and the end of the stamp duty exemption on established homes are likely to prompt many to reassess their options and financial strategies.

The changes come at a time when the federal budget has placed significant emphasis on supporting first-home buyers, making the Tasmanian government’s decision particularly impactful for residents in the state. As the new financial year approaches, prospective first-home buyers in Tasmania will need to adjust to the evolving policy landscape and consider the implications for their home-buying plans.