How Much Does It Cost To Build A House In Tasmania?

It usually costs from $2,500 up to $6,000 a square metre to build a house in Tasmania, according to construction experts.

This means building an average Tasmanian home could cost anywhere from $456,000 to $1,094,400, based on the statewide median new house size of 182.4sqm.

Interestingly, the median-sized new build in Tasmania is far smaller than in mainland states. This could partly be due to the fact that construction costs also tend to be higher.

“It’s consistently more expensive to build a home in Tasmania than it is on the mainland,” BuildHer founder Rebeka Morgan explained.

“That’s because many of the materials need to come from elsewhere and it can be harder to move them around.”

For Tasmanians looking to build high-end homes, Morgan said the per metre cost can get as high as $8,000 or more a square metre, especially if they’re looking to use premium materials or they have a particularly challenging build.

MORE: How much does it cost to build a house in Adelaide?

Cost to build a house in Tasmania – per number of bedrooms

Most construction work is quoted on a “per square metre” basis and homes with more bedrooms tend to have more square metres. 

Below, we show you what you can expect to pay for an average sized two-, three-, four- and five-bedroom home. 

Cost of a 3-bedroom house in Tasmania

A three bedroom house in Tasmania should cost anywhere from $437,500 to $1,050,000. This is calculated based on an average-sized three bedroom home of 175sqm.

This is relatively close to the average new home size in Tasmania.

Cost of a 2-bedroom house in Tasmania

Building a two bedroom house in Tasmania will cost between $300,000 and $720,000, based on an average two-bedroom home size of 120sqm.

Cost of a 4-bedroom house in Tasmania

To build a four-bedroom house in Tasmania, you should expect to pay between $650,000 and $1,560,000. This is based on an average house size of 260sqm. 

This would be close to the median new build in mainland Australia, but it is far larger than the average new build size on the Apple Isle.

Cost of a 5-bedroom house in Tasmania

The average cost of building a five bedroom house in Tasmania is $750,000 to $1,800,000. 

Costs can get higher still, depending on the fittings and fixtures you choose. 

“Expectations have really shifted for what a home includes,” Morgan said. 

“A bedroom used to be a simple plasterboard room with a single light fitting. Now, it’s custom joinery, high-end finishes, and added details—each of which layers on extra costs.”

MORE: How much does it cost to build a house in Perth?

Building an average Tasmanian home could cost anywhere from $456,000 to $1,094,400. Picture: realestate.com.au/buy

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How much does a second storey cost in Tasmania?

Building a second storey costs as much as an extra $1,000 per square metre when compared with a single storey residence, Morgan said. 

So, building an average sized Tasmania home as a two-storey rather than one storey dwelling could add as much as $182,400 to the project. One of the key reasons for this is the extra build complexity involved in adding an additional level. 

“Additional external work becomes harder with scaffolding, staircases, and more complex trades involved,” Morgan explained.

“’Design efficiency’ is crucial: the relationship between external walls and floor area impacts cost. Features like cantilevers or complex layouts can increase costs further.

“By optimising the design—keeping it straightforward and minimising unnecessary complexities—you can manage these additional expenses more effectively.”

Is it cheaper to build or to buy in Tasmania?

Given high building costs and relatively affordable property prices, it’s often cheaper to buy rather than build in Tasmania. However, Morgan said there are things any home builder can do to control costs.

“Start by focusing on the structure and choosing materials wisely,” she explained.

“Using off-the-shelf options or materials that are less labor-intensive, like lightweight cladding or timber stumps, can make a significant difference to your budget.”

MORE: How much does it cost to build a house in Melbourne?

That said, whether buying or building in your circumstances will depend on several factors.

1. What will you pay for land?

The statewide median land value in Tasmania rose to $255,000 by 2022 according to one report.

Land close to the centre of Hobart, or in other other upmarket parts of the state can sell for more.

2. What is the cost of building?

The cost of building in Tasmania can be expensive, and the more it costs to build, the higher the overall price will be.

3. How much transfer (stamp) duty will you pay?

In Tasmania, you’ll usually pay more stamp duty on an established home than if you buy vacant land on which to build. 

For example, if you were to buy a new home in Tasmania valued at $800,000 as your main residence, you would usually pay stamp duty of $31,185. However, if you bought a block of land for $250,000 to build a $550,000 home (total being $800,000 also), your stamp duty would be $7,935.

4. Do you qualify for a transfer duty exemption?

In Tasmania, eligible first home buyers pay no stamp duty at all on homes valued up to $750,000 on established homes valued up to $750,000.  

5. Are you a first home buyer?

You may also be entitled to other grants, including the First Home Owner Grant, if you build your home rather than buying an established one. 

It’s often cheaper to buy rather than build in Tasmania, but there are things home builders can do to control costs. Picture: realestate.com.au/buy

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Factors affecting building costs in Tasmania

The ultimate cost of building a house in Tasmania depends on several factors.

1. The finishings you choose

Morgan said the finishings you choose in your build will have a greater effect on the ultimate price you pay than any factor – even more than floor area. 

“It’s good fun to add [extra] features, but it’s less fun when you have to pay for them,” she explained.

“So focus on what truly adds value and comfort to your home without overspending.”

2. The size of your home

Larger homes require more building materials, also making them more expensive

Perhaps because of the high cost of materials, the average size of a new build is well below the average Australian new home size of 195.8sqm, according to a Commsec report. 

3. The type of design you choose

The type of home you choose can lead to a massive price difference. At one end of the spectrum are project builders; at the other end are bespoke architect-designed homes. 

“Project homes benefit from efficiencies—they’re rolling out floor plans designed and tested numerous times,” Morgan said.

“This makes them much cheaper than anything a builder could do bespoke, where you’re engaging each party for a one-off build.”

4. The site you’re building on

Building on a steeply sloping block adds to the complexity of a build; so too does building in a tight space. That’s because builders are likely to find it more difficult to get machinery on site and may have to carry out expensive processes, such as excavation and building retaining walls. 

5. Whether you suffer any delays

Budget-busting delays don’t have to be an inevitable part of building according to Morgan. However, she explained, “having a realistic timeframe and understanding how the project works are crucial.”

“Keeping the builder’s schedule on track and being proactive about ordering materials can save a lot of headaches – and costs – down the line.”

6. Planning approval costs

These are usually council-based, and can add to the cost of a build. The more complex the design and construction, the more it’s likely to cost.

MORE: How much does it cost to build a house in Brisbane?

The type of home design you choose can lead to a massive price difference. Picture: realestate.com.au

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Government grants available for new homes in Tasmania

If you’re building a house in Tasmania, you may be entitled to a government grant to help meet your costs. 

Tasmania First Home Owner Grant

How much is it?: $10,000 ($30,000 before 1 July 2024) 

What is it?: A one off payment towards the purchase price

Who is eligible?: First home buyers, including those building a new property.

Available to investors?: No.

Read more about the Tasmania First Home Owner Grant

HomeBuilder Grant

How much is it?: $15,000 for contracts entered into between 1 January and 31 March 2021; $25,000 for contracts entered into between 4 June and 31 December 2020

What is it?: A one off payment towards building a home

Who is eligible?: Buyers who entered into a contract to build a home between 4 June 2020 and 31 March 2021 and complete their application before 30 June 2025 

What thresholds apply?: Value of land must be less than $750,000 (including land and contract to build). Must earn less than $125,000 as an individual or $200,000 as a couple. 

Available to investors?: No.

Read more about the HomeBuilder grant

FAQs: Cost of building a house in Tasmania

Below are some of the most common questions people ask about building a house in Tasmania.

Do I need a contingency buffer when building a house? How much should it be? 

Because the cost of building a house isn’t precise, you should always have a buffer, Morgan said. This can change as the project progresses.

“At the start you should plan for a larger buffer, around 20%, because things can change as the design evolves and unknowns arise,” she explained.

“As the project progresses and you’ve locked in a builder and materials, you can reduce that buffer to around 5-10%, depending on the complexity of the build.”

MORE: How much does it cost to build a house in Sydney?

How long does it take to build a house in Tasmania?

Building a house in Tasmania can take anywhere from four months to a year (or more).

How do you finance a new build?

You’ll usually need to take out a construction loan. These work differently from standard home loans. 

That’s because, instead of the funds being released all at once, they’re staggered to correspond with six construction milestones. You won’t pay interest on the full loan amount right from the start, but only on the funds you’ve received. 

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