Nebraska capital gains tax on real estate is ordinary income tax, and the top rate is falling fast: 4.55% for 2026, with 3.99% scheduled for 2027. A 1031 exchange in Nebraska defers that state tax and the much bigger federal bill, but not the documentary stamp tax the seller pays at recording, which jumped to $3.32 per $1,000 in July 2026.
Reviewed by Jon Hilley, CEO & Founder of 1031 Specialists. Last reviewed September 29, 2026.
| State tax on real estate gains | Top rate 4.55% for 2026 (joint income over $79,800) |
|---|---|
| Long-term capital gains treatment | Taxed as ordinary income; no real estate exclusion |
| Nonresident withholding at closing | None for individual sellers |
| Withholding form | None; nonresidents file a Nebraska nonresident return |
| Transfer or conveyance tax (a 1031 does not defer it) | Documentary stamp tax $3.32 per $1,000 (since July 18, 2026), grantor liable |
| Clawback on out-of-state replacement property | None |
| Conforms to Section 1031 | Yes |
| Scheduled change | Top rate 3.99% for 2027 under LB 754 |
Table of contents
- How much is capital gains tax on real estate in Nebraska?
- Nebraska tax on a $300,000 gain: worked example
- Nebraska's falling rate and the timing of a taxable sale
- Nonresident sellers and withholding in Nebraska
- Nebraska documentary stamp tax: $3.32 per $1,000 since July 2026
- Conformity and clawback
- Moving into or out of Nebraska
- Where Nebraska exchanges happen
- The federal rules in brief
- Mistakes we see in Nebraska exchanges
- Start your Nebraska 1031 exchange
- Frequently asked questions
- Sources
How much is capital gains tax on real estate in Nebraska?
Nebraska taxes a real estate gain as ordinary income. For 2026 the brackets for joint filers run 2.46%, 3.51% and 4.55%, and the top 4.55% rate applies to taxable income above $79,800. Almost any investment property sale pushes a seller into that top bracket, so 4.55% is the number to plan with. Nebraska has no lower rate for long-term gains, no exclusion for long-held real estate and no local income tax. Depreciation recapture is taxed at the same rates as the rest of the gain.
Federal tax on the same sale is far larger: 15% or 20% on the long-term gain (20% above $613,700 of joint taxable income in 2026), up to 25% on unrecaptured Section 1250 depreciation, and the 3.8% net investment income tax above $250,000 of joint income. Compare selling outright with exchanging in our capital gains vs. 1031 comparison.
Nebraska tax on a $300,000 gain: worked example
Assumptions: a $300,000 long-term gain on a Nebraska investment property, $100,000 of it unrecaptured Section 1250 depreciation, married filing jointly, already in the top federal bracket and Nebraska's top 2026 bracket of 4.55%.
| Federal: 25% on $100,000 of unrecaptured §1250 gain | $25,000 |
|---|---|
| Federal: 20% on the remaining $200,000 | $40,000 |
| Federal: 3.8% NIIT on $300,000 | $11,400 |
| Federal subtotal | $76,400 |
| Nebraska: 4.55% x $300,000 | $13,650 |
| Total tax deferred by a full 1031 exchange | $90,050 |
Run your own depreciation figure through the depreciation recapture calculator before you decide.
Nebraska's falling rate and the timing of a taxable sale
LB 754, passed in 2023, has been stepping the top rate down each year: 5.84% for 2024, 5.20% for 2025, 4.55% for 2026 and 3.99% scheduled for years after January 1, 2027. On a $300,000 gain, the drop from 4.55% to 3.99% is worth $1,680. That is small next to the $76,400 federal bill, so the scheduled cut is not a reason to skip an exchange. It can matter for a seller who has already decided to cash out late in the year: closing in early January instead of December moves the gain into the lower-rate year and delays the tax by twelve months. The same logic applies to the eventual sale of replacement property you acquire now.
Nonresident sellers and withholding in Nebraska
Nebraska does not have a withholding form that title companies use to hold back part of a nonresident individual's sale price at closing, the way Colorado does with DR 1083. Your exchange proceeds go straight to your qualified intermediary. A nonresident who sells Nebraska property without exchanging still owes Nebraska tax on that gain and files a Nebraska nonresident return. Foreign sellers remain subject to federal FIRPTA withholding; our FIRPTA guide explains how to handle it inside an exchange.
Nebraska documentary stamp tax: $3.32 per $1,000 since July 2026
Nebraska charges a documentary stamp tax when a deed is recorded. Under LB 1067 (2026) the rate rose to $3.32 per $1,000 of value on July 18, 2026, up from $2.32 (and $2.25 before September 2025). It is scheduled to revert to $2.32 on January 1, 2032. Liability falls on the grantor, which is normally the seller, though the buyer or an agent can pay it at recording. The grantee must also file Form 521, the Real Estate Transfer Statement, or the register of deeds will not record the deed.
A 1031 exchange does not defer the stamp tax. On a $1.5 million sale it is $4,980. It is a normal selling expense that can be paid from the closing without creating boot. Older quotes and seller net sheets may still use the $2.25 or $2.32 rate, so check the figure on any settlement statement prepared after July 18, 2026.
Conformity and clawback
Nebraska computes income tax from federal adjusted gross income, so a deferral under Section 1031 on your federal return carries to your Nebraska return automatically. There is no annual reporting when a Nebraska resident exchanges into property in another state, and Nebraska does not claw back the deferred gain if you later move. A taxable sale of replacement property is taxed by Nebraska if you live here at that time, or if the property sold is in Nebraska.
Moving into or out of Nebraska
Retirees and farm heirs leaving Nebraska often exchange into South Dakota, which has no income tax, or into Texas, Florida and Arizona. Because Nebraska has no clawback, gain deferred into out-of-state property escapes Nebraska once you become a resident elsewhere. Inbound, Colorado owners trade high-priced Front Range property for cheaper Omaha and Lincoln multifamily. A Colorado seller who does that faces Colorado's 2% withholding unless the exchange is documented, and a California seller keeps filing FTB 3840 on the Nebraska replacement.
Where Nebraska exchanges happen
Omaha and the growing Sarpy County suburbs account for most commercial and multifamily volume, with industrial space along I-80 and around the Papillion and La Vista corridors. Lincoln trades student and workforce housing tied to the University of Nebraska and state government. Grand Island, Kearney and North Platte are smaller markets for net-leased retail and apartments. Farmland and ranch land across the state is a large share of Nebraska exchanges, including trades of land for land, for commercial buildings or for Delaware Statutory Trust interests; see our DST guide.
The federal rules in brief
Identify replacement property in writing within 45 days of your Nebraska closing and finish the purchase within 180 days. A qualified intermediary must hold the sale proceeds the whole time. Reinvest the full net sale price and replace the old mortgage balance, or you will owe tax on the shortfall. Check your identification with the 45-day identification validator and estimate deferral in the 1031 exchange calculator.
Mistakes we see in Nebraska exchanges
- Budgeting the documentary stamp tax at the old $2.25 rate on a closing after July 18, 2026.
- Skipping an exchange because the state rate is falling, then paying $76,400 of federal tax to save a fraction of a point in Nebraska.
- Exchanging farmland that includes the farmhouse without carving out the personal residence, which does not qualify.
- Underwriting an Omaha or Lincoln replacement with the seller's property tax bill instead of the reassessed value after sale.
- Showing up to record the replacement deed without a completed Form 521, which the register of deeds needs before it will record.
Start your Nebraska 1031 exchange
Contact us before you sign closing documents on the sale. We prepare the exchange agreement, work with your Nebraska title or escrow company, hold the proceeds and calendar both deadlines. Start your exchange or book an intro call.
Frequently asked questions
How can I avoid capital gains tax on real estate in Nebraska?
Complete a 1031 exchange through a qualified intermediary and reinvest in like-kind investment property within 180 days. That defers the Nebraska tax (4.55% top rate for 2026) and all of the federal tax. Holding until death can eliminate the deferred gain through the basis step-up.
What is Nebraska's capital gains tax rate for 2026?
Nebraska taxes capital gains as ordinary income. For 2026 the top rate is 4.55% on joint taxable income over $79,800, and LB 754 schedules a 3.99% top rate for 2027.
How much is the Nebraska documentary stamp tax?
$3.32 per $1,000 of value since July 18, 2026, paid by the grantor when the deed is recorded. A 1031 exchange does not defer it. The rate is scheduled to return to $2.32 in 2032.
Does Nebraska withhold tax from nonresident sellers?
There is no Nebraska closing withholding form for nonresident individual sellers. A nonresident who sells without exchanging still owes Nebraska tax on the gain and files a nonresident return.
Can I exchange Nebraska farmland for a rental in another state?
Yes. Farmland and rental or commercial property are like-kind to each other. Carve out any home you live in, and plan for the replacement state's own taxes.
Sources
- Nebraska Department of Revenue: 2026 tax calculation schedule
- Nebraska Legislature: LB 754 (2023) rate schedule
- Nebraska Department of Revenue: Documentary stamp tax rate history
- Nebraska Department of Revenue: Documentary stamp tax regulations (Chapter 52)
Related: Iowa, Kansas, Missouri, Wyoming and all 50 states.
This page is general information, not tax or legal advice. Confirm Nebraska rates and stamp tax figures with your advisor and title company.
