Alaska capital gains tax on real estate does not exist for individuals: there is no personal state income tax, no state withholding at closing and no real estate transfer tax on the deed. A 1031 exchange in Alaska is therefore a federal play, and on a $300,000 gain it defers about $76,400 that would otherwise go to the IRS.
Reviewed by Jon Hilley, CEO & Founder of 1031 Specialists. Last reviewed September 29, 2026.
| State tax on real estate gains | None for individuals; Alaska has no personal income tax |
|---|---|
| Long-term capital gains treatment | Not taxed by the state; federal tax only |
| Nonresident withholding at closing | None |
| Withholding form | None required by Alaska (federal FIRPTA still applies to foreign sellers) |
| Transfer or conveyance tax (a 1031 does not defer it) | No state or local transfer tax; recording fees only |
| Clawback on out-of-state replacement property | None |
| Conforms to Section 1031 | Not applicable for individuals (no income tax) |
| Property tax note | Municipal only; just 24 cities and boroughs levy property tax |
Table of contents
- How much is capital gains tax on real estate in Alaska?
- Alaska tax on a $300,000 gain: worked example
- Is there withholding when a nonresident sells in Alaska?
- Alaska has no real estate transfer tax
- Conformity and clawback in Alaska
- Property tax depends on the borough
- Moving into or out of Alaska
- Where Alaska exchanges happen
- Federal 1031 rules for Alaska property
- Alaska 1031 mistakes to avoid
- Start your Alaska 1031 exchange
- Frequently asked questions
- Sources
How much is capital gains tax on real estate in Alaska?
For individuals, zero. The state's own tax summary says there is no personal state income tax, which means no tax on capital gains, no treatment of depreciation to reconcile and no Alaska return to file for the sale. Boroughs and cities do not tax income either.
The exception is property held in a C corporation, which is subject to Alaska's corporate income tax on its gains. Most investors hold rentals personally or in LLCs taxed as partnerships or disregarded entities, where the corporate tax does not apply.
The federal tax is what you are planning around: 0%, 15% or 20% on long-term gain (20% above $545,500 single or $613,700 joint taxable income in 2026), up to 25% on the depreciation portion (unrecaptured §1250 gain), and the 3.8% net investment income tax above $200,000 single or $250,000 joint MAGI.
Alaska tax on a $300,000 gain: worked example
Assumptions: a $300,000 long-term gain on an Alaska rental, $100,000 of it from depreciation, a married couple filing jointly in the top federal bracket.
| Line | Math | Tax |
|---|---|---|
| Federal: unrecaptured §1250 gain | 25% × $100,000 | $25,000 |
| Federal: remaining long-term gain | 20% × $200,000 | $40,000 |
| Federal: net investment income tax | 3.8% × $300,000 | $11,400 |
| Federal subtotal | $76,400 | |
| Alaska state income tax | No personal income tax | $0 |
| Total deferred by a full 1031 | $76,400 + $0 | $76,400 |
The depreciation line alone is $25,000. Run your own figures with the depreciation recapture calculator and the capital gains vs. 1031 exchange comparison.
Is there withholding when a nonresident sells in Alaska?
No. Alaska has no state withholding on real estate sales, for residents or nonresidents, because there is no income tax to prepay. Your full proceeds can go to your qualified intermediary.
A seller who lives in another state generally reports the gain to that state, which may tax it without any credit since Alaska charged nothing. Foreign sellers remain subject to federal FIRPTA withholding; see our guide for foreigners selling US property.
Alaska has no real estate transfer tax
Alaska does not charge a state deed tax, and its cities and boroughs do not add one. At closing you pay recording fees at the recorder's office and your normal title and escrow costs, but no percentage-of-price tax on either your sale or your replacement purchase. Compare that with Washington's graduated excise tax or Hawaii's conveyance tax, both paid in cash at closing and never deferred by an exchange.
The costs to watch in Alaska are local instead: property tax where a municipality levies it, and local sales taxes, which the state reports range from 1% to 7% across 107 municipalities, typically 2% to 5%. Sales tax does not apply to the sale of the real estate itself, but it can apply to services and some rentals, depending on the municipality.
Conformity and clawback in Alaska
With no personal income tax, Alaska has no §1031 conformity question and no clawback. If you exchange Alaska property into property in another state, Alaska never asks about the deferred gain again.
The reverse is not always true. If you exchange property from a clawback state into Alaska, that state's claim can follow you. California requires Form FTB 3840 each year until California-source deferred gain is recognized; see our California page. Oregon has a similar rule.
Property tax depends on the borough
Alaska's Office of the State Assessor reports that only 24 municipalities levy a property tax, and 4 of the state's 19 organized boroughs do not levy one at all. A replacement property's carrying cost can therefore swing widely depending on where it sits. Anchorage, Fairbanks North Star, Mat-Su, Juneau and Kenai Peninsula all levy property tax at different rates, while many smaller communities rely on sales tax instead.
When you compare replacement properties, ask the local assessor for the current mill rate and any service-area levies rather than relying on a statewide average. The difference between two similar fourplexes in neighboring jurisdictions can be several thousand dollars a year.
Moving into or out of Alaska
Leaving Alaska: many Alaskans sell rentals when they relocate, often to Washington, Arizona or Idaho. Gain on Alaska property is federal only no matter where you live when you sell, but your new home state may tax it if you sell after moving. Selling or exchanging while still an Alaska resident removes that risk. Washington's capital gains tax exempts real estate, so the move there is usually tax neutral for property sales.
Moving to Alaska: property you keep in another state stays taxable in that state when sold. An exchange of that property into Alaska real estate defers the tax, and future appreciation on the Alaska property is federal only.
Where Alaska exchanges happen
Anchorage accounts for most exchange activity, with small multifamily, office and industrial property near the port and airport. The Matanuska-Susitna Borough (Wasilla and Palmer) draws single-family rental investors, Fairbanks has demand tied to the military bases and the university, and Juneau and the Kenai Peninsula see smaller multifamily and seasonal properties. Inventory is thin in every market, so many Alaska sellers also look at out-of-state replacements or Delaware statutory trusts.
Federal 1031 rules for Alaska property
You must identify replacement property in writing within 45 days of your sale and close within 180 days. A qualified intermediary holds the proceeds; if you receive them, the exchange fails. To defer the full gain, buy equal or greater value and replace your debt or add cash. See the 45-day identification validator, the 1031 exchange calculator and our 1031 exchange guides.
Alaska 1031 mistakes to avoid
- Deciding not to exchange because Alaska has no income tax, then paying $76,400 of federal tax on a $300,000 gain.
- Moving to a taxing state before the sale closes, which can hand that state the whole gain.
- Comparing replacement properties without checking whether the municipality levies property tax and at what mill rate.
- Starting the 45-day clock with no realistic replacement in a thin local market; line up out-of-state or DST backups early.
Start your Alaska 1031 exchange
Open your exchange before closing so we can send the assignment documents to your title company and hold the proceeds. Start your exchange or book an intro call.
Frequently asked questions
How can I avoid capital gains tax on real estate in Alaska?
Alaska has no state capital gains tax for individuals, so the tax to plan for is federal. A 1031 exchange defers it when you reinvest all proceeds in like-kind real property through a qualified intermediary.
Does Alaska have a capital gains tax?
No. Alaska has no personal income tax, so individuals pay no state tax on real estate gains. C corporations are subject to Alaska corporate income tax.
Is there withholding when a nonresident sells Alaska real estate?
No. Alaska does not withhold on real estate sales. Foreign sellers still face federal FIRPTA withholding.
Does Alaska charge a real estate transfer tax?
No. Alaska and its municipalities do not charge a transfer tax on deeds; you pay recording fees only.
Can I exchange Alaska property for property in another state?
Yes. Any US investment real property qualifies, and Alaska has no clawback, but the state where the replacement sits may tax a later sale.
Sources
- Alaska Office of the State Assessor: Alaska Tax Facts
- Alaska Office of the State Assessor
- California FTB: Form FTB 3840 instructions
- IRS: Like-kind exchanges now limited to real property
- IRS Topic 409: Capital gains and losses
Related: Washington, Oregon, Hawaii and all 50 states.
General information for Alaska property owners, not tax or legal advice. We act as a qualified intermediary only; check your situation with a tax professional.
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