diff --git a/web/src/lib/components/forms/tag-asset-form.svelte b/web/src/lib/components/forms/tag-asset-form.svelte
index a95b67494e..3419e62a18 100644
--- a/web/src/lib/components/forms/tag-asset-form.svelte
+++ b/web/src/lib/components/forms/tag-asset-form.svelte
@@ -5,10 +5,8 @@
   import Combobox, { type ComboBoxOption } from '../shared-components/combobox.svelte';
   import FullScreenModal from '../shared-components/full-screen-modal.svelte';
   import { onMount } from 'svelte';
-  import { getAllTags, type TagResponseDto } from '@immich/sdk';
+  import { getAllTags, upsertTags, type TagResponseDto } from '@immich/sdk';
   import Icon from '$lib/components/elements/icon.svelte';
-  import { AppRoute } from '$lib/constants';
-  import FormatMessage from '$lib/components/i18n/format-message.svelte';
   import { SvelteSet } from 'svelte/reactivity';
 
   interface Props {
@@ -22,6 +20,7 @@
   let tagMap = $derived(Object.fromEntries(allTags.map((tag) => [tag.id, tag])));
   let selectedIds = $state(new SvelteSet<string>());
   let disabled = $derived(selectedIds.size === 0);
+  let allowCreate: boolean = $state(true);
 
   onMount(async () => {
     allTags = await getAllTags();
@@ -29,12 +28,18 @@
 
   const handleSubmit = () => onTag([...selectedIds]);
 
-  const handleSelect = (option?: ComboBoxOption) => {
+  const handleSelect = async (option?: ComboBoxOption) => {
     if (!option) {
       return;
     }
 
-    selectedIds.add(option.value);
+    if (option.id) {
+      selectedIds.add(option.value);
+    } else {
+      const [newTag] = await upsertTags({ tagUpsertDto: { tags: [option.label] } });
+      allTags.push(newTag);
+      selectedIds.add(newTag.id);
+    }
   };
 
   const handleRemove = (tag: string) => {
@@ -48,22 +53,13 @@
 </script>
 
 <FullScreenModal title={$t('tag_assets')} icon={mdiTag} onClose={onCancel}>
-  <div class="text-sm">
-    <p>
-      <FormatMessage key="tag_not_found_question">
-        {#snippet children({ message })}
-          <a href={AppRoute.TAGS} class="text-immich-primary dark:text-immich-dark-primary underline">
-            {message}
-          </a>
-        {/snippet}
-      </FormatMessage>
-    </p>
-  </div>
   <form {onsubmit} autocomplete="off" id="create-tag-form">
     <div class="my-4 flex flex-col gap-2">
       <Combobox
         onSelect={handleSelect}
         label={$t('tag')}
+        {allowCreate}
+        defaultFirstOption
         options={allTags.map((tag) => ({ id: tag.id, label: tag.value, value: tag.id }))}
         placeholder={$t('search_tags')}
       />
diff --git a/web/src/lib/components/shared-components/combobox.svelte b/web/src/lib/components/shared-components/combobox.svelte
index 9dcb4d8f25..a6a1422eef 100644
--- a/web/src/lib/components/shared-components/combobox.svelte
+++ b/web/src/lib/components/shared-components/combobox.svelte
@@ -36,6 +36,14 @@
     options?: ComboBoxOption[];
     selectedOption?: ComboBoxOption | undefined;
     placeholder?: string;
+    /**
+     * whether creating new items is allowed.
+     */
+    allowCreate?: boolean;
+    /**
+     * select first matching option on enter key.
+     */
+    defaultFirstOption?: boolean;
     onSelect?: (option: ComboBoxOption | undefined) => void;
   }
 
@@ -45,6 +53,8 @@
     options = [],
     selectedOption = $bindable(),
     placeholder = '',
+    allowCreate = false,
+    defaultFirstOption = false,
     onSelect = () => {},
   }: Props = $props();
 
@@ -141,7 +151,7 @@
   const onInput: FormEventHandler<HTMLInputElement> = (event) => {
     openDropdown();
     searchQuery = event.currentTarget.value;
-    selectedIndex = undefined;
+    selectedIndex = defaultFirstOption ? 0 : undefined;
     optionRefs[0]?.scrollIntoView({ block: 'nearest' });
   };
 
@@ -221,9 +231,15 @@
     searchQuery = selectedOption ? selectedOption.label : '';
   });
 
-  let filteredOptions = $derived(
-    options.filter((option) => option.label.toLowerCase().includes(searchQuery.toLowerCase())),
-  );
+  let filteredOptions = $derived.by(() => {
+    const _options = options.filter((option) => option.label.toLowerCase().includes(searchQuery.toLowerCase()));
+
+    if (allowCreate && searchQuery !== '' && _options.filter((option) => option.label === searchQuery).length === 0) {
+      _options.unshift({ label: searchQuery, value: searchQuery });
+    }
+
+    return _options;
+  });
   let position = $derived(calculatePosition(bounds));
   let dropdownDirection: 'bottom' | 'top' = $derived(getComboboxDirection(bounds, visualViewport));
 </script>
@@ -352,7 +368,7 @@
           id={`${listboxId}-${0}`}
           onclick={() => closeDropdown()}
         >
-          {$t('no_results')}
+          {allowCreate ? searchQuery : $t('no_results')}
         </li>
       {/if}
       {#each filteredOptions as option, index (option.id || option.label)}