Tasmanians will be able to rent out up to four rooms in their homes on platforms such as Airbnb as the government moves to cut red tape in the tourism industry.
The state government announced on Friday it would embrace the sharing economy to help meet the demand for accommodation across the state.
Premier Will Hodgman said studies had shown Tasmania would need 1200 extra rooms by 2020, especially on the east coast, where occupancy rates were as high as 99 per cent.
The changes will come into effect from July 1, giving home owners the ability to rent out their properties for short stays as long as they meet safety standards.
Planning Minister Peter Gutwein said home owners should be given the right to advertise rooms without the government interfering.
"It's only fair that a home owner can rent out a room in their house without having to ask the government for permission," Mr Gutwein said.
"It's just common sense. If you can have a relative over to stay, why not someone else?"
Mr Hodgman expects the changes will create more job opportunities for Tasmanians.
Airbnb, which helps people advertise their spare rooms or entire dwellings online, has welcomed the changes.
Airbnb Australia country manager Sam McDonagh said its listings in Tasmania were already helping the economies of areas where rooms were not readily available.
"The vast majority of Tasmanian listings are outside traditional hotel district, so our guests live like a local, spending money at cafes, shops and restaurants not normally visited by tourists," she said.
Airbnb has 3000 listings in Tasmania, with guests staying for two-and-a-half days on average.
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