diff --git a/.changeset/wide-animals-listen.md b/.changeset/wide-animals-listen.md
new file mode 100644
index 000000000..a231b44ad
--- /dev/null
+++ b/.changeset/wide-animals-listen.md
@@ -0,0 +1,5 @@
+---
+'sv': patch
+---
+
+fix(demo): rewrite relative import extensions to JavaScript equivalents _(`tsconfig.json` update)_
diff --git a/packages/create/shared/+library+typescript/tsconfig.json b/packages/create/shared/+library+typescript/tsconfig.json
index 371777edd..54696e457 100644
--- a/packages/create/shared/+library+typescript/tsconfig.json
+++ b/packages/create/shared/+library+typescript/tsconfig.json
@@ -1,7 +1,7 @@
 {
 	"extends": "./.svelte-kit/tsconfig.json",
 	"compilerOptions": {
-		"allowImportingTsExtensions": true,
+		"rewriteRelativeImportExtensions": true,
 		"allowJs": true,
 		"checkJs": true,
 		"esModuleInterop": true,
diff --git a/packages/create/shared/+typescript/tsconfig.json b/packages/create/shared/+typescript/tsconfig.json
index 5a3b413ed..2c2ed3c4d 100644
--- a/packages/create/shared/+typescript/tsconfig.json
+++ b/packages/create/shared/+typescript/tsconfig.json
@@ -1,7 +1,7 @@
 {
 	"extends": "./.svelte-kit/tsconfig.json",
 	"compilerOptions": {
-		"allowImportingTsExtensions": true,
+		"rewriteRelativeImportExtensions": true,
 		"allowJs": true,
 		"checkJs": true,
 		"esModuleInterop": true,
diff --git a/packages/create/templates/demo/tsconfig.json b/packages/create/templates/demo/tsconfig.json
index 8b726c486..1883cb06a 100644
--- a/packages/create/templates/demo/tsconfig.json
+++ b/packages/create/templates/demo/tsconfig.json
@@ -1,6 +1,6 @@
 {
 	"extends": "./.svelte-kit/tsconfig.json",
 	"compilerOptions": {
-		"allowImportingTsExtensions": true
+		"rewriteRelativeImportExtensions": true
 	}
 }
diff --git a/packages/create/templates/library/package.template.json b/packages/create/templates/library/package.template.json
index fae2ffdcf..314b4a4a3 100644
--- a/packages/create/templates/library/package.template.json
+++ b/packages/create/templates/library/package.template.json
@@ -25,7 +25,7 @@
 	"devDependencies": {
 		"@sveltejs/adapter-auto": "^7.0.0",
 		"@sveltejs/kit": "^2.48.5",
-		"@sveltejs/package": "^2.5.4",
+		"@sveltejs/package": "^2.5.6",
 		"@sveltejs/vite-plugin-svelte": "^6.2.1",
 		"publint": "^0.3.15",
 		"svelte": "^5.43.8",
diff --git a/tsconfig.json b/tsconfig.json
index 295f38735..642714f4f 100644
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -13,7 +13,7 @@
 		"checkJs": true,
 		"moduleResolution": "NodeNext",
 		"module": "NodeNext",
-		"allowImportingTsExtensions": true,
+		"rewriteRelativeImportExtensions": true,
 		"resolveJsonModule": true,
 		"skipLibCheck": true,
 		"strict": true,