A 1031 exchange in New Hampshire lets real estate investors sell an investment property and reinvest in like-kind property while deferring the tax on the gain. The exchange rules are federal and identical everywhere. New Hampshire has no state income tax, so the only tax a New Hampshire exchange defers is federal, but the state funds itself in a way that puts a different cost front and center: very high property taxes. We act as your qualified intermediary, holding the proceeds and handling the documentation so the exchange stays valid from sale to closing.
Table of contents
- Is there a capital gains tax on real estate in New Hampshire?
- The trade-off: high property taxes
- New Hampshire 1031 exchange rules and timeline
- 1031 exchanges across New Hampshire markets
- Common New Hampshire 1031 exchange mistakes
- Start your New Hampshire 1031 exchange
- Frequently asked questions
Is there a capital gains tax on real estate in New Hampshire?
No. New Hampshire has no broad income tax, and the interest and dividends tax that the state once levied was fully repealed as of January 1, 2025, so there is no state capital gains tax on a property sale and no state withholding at closing. The tax you defer in a New Hampshire 1031 is entirely federal:
- Long-term capital gains at 0%, 15%, or 20%, with the 20% rate applying above $545,500 of taxable income for single filers and $613,700 for married couples filing jointly in 2026.
- The 3.8% Net Investment Income Tax above $200,000 of modified adjusted gross income for single filers, $250,000 for married couples.
- Depreciation recapture, taxed as unrecaptured Section 1250 gain at up to 25%.
A properly structured New Hampshire exchange defers all of it. The full federal framework is in our main 1031 exchange guide.
The trade-off: high property taxes
New Hampshire raises revenue without an income tax or a general sales tax, and the way it does that is through property tax. The state has among the highest effective property tax rates in the country, which is the cost that belongs at the center of a replacement-property decision here. The income tax saving that makes New Hampshire attractive on the sale side is partly recovered through carrying cost on whatever you buy, so model the local property tax rate carefully before you commit. New Hampshire also charges a real estate transfer tax on the conveyance, customarily split between buyer and seller, which is a transaction cost on the sale rather than an income tax and is not deferred by a 1031.
New Hampshire 1031 exchange rules and timeline
The federal rules govern, and the deadlines are strict:
- 45-day identification. Identify replacement property in writing within 45 days of the sale.
- 180-day closing. Close within 180 days of the sale, or by your return due date including extensions, whichever is earlier.
- No constructive receipt. Proceeds go to your qualified intermediary, never to you.
- Equal or greater value and debt. Reinvest all net proceeds and match or exceed the relinquished value and debt, or the shortfall is taxable boot.
- Same taxpayer. The entity that sold must be the entity that buys.
1031 exchanges across New Hampshire markets
Southern New Hampshire carries most of the state's exchange volume. Manchester and Nashua, within commuting distance of Boston and free of New Hampshire income tax, draw multifamily and commercial demand from investors and residents alike. The Seacoast around Portsmouth adds higher-value commercial and multifamily property. To the north, the Lakes Region and the White Mountains carry resort, short-term rental, and second-home property, where local rental rules and seasonal demand belong in the underwriting. Concord, the capital, adds further commercial activity. Across all of these, the property tax rate is the variable to check first.
Common New Hampshire 1031 exchange mistakes
- Underwriting a replacement property without the local property tax rate, which is high and is the main offset to New Hampshire's no-income-tax appeal.
- Forgetting the real estate transfer tax on the sale, which is separate from income tax and not deferred.
- Taking receipt of the proceeds, or missing the 45-day identification window.
- Trading down or pulling cash out, which creates taxable boot.
Start your New Hampshire 1031 exchange
Set up your exchange before your relinquished property closes, so the proceeds never reach your hands and the 45-day and 180-day clocks start clean. Contact our team to begin, or to talk through a specific deal.
Frequently asked questions
Does New Hampshire have a capital gains tax on real estate?
No. New Hampshire has no broad income tax, and the interest and dividends tax was repealed as of 2025, so there is no state capital gains tax and no state withholding on a sale. Federal capital gains tax still applies.
Why does property tax matter so much for a New Hampshire 1031?
New Hampshire funds itself largely through property tax rather than income or sales tax, so its property tax rates are among the highest in the country. The carrying cost on a replacement property can offset much of the no-income-tax benefit.
Do I still pay federal tax on a New Hampshire 1031?
A 1031 defers federal capital gains, the Net Investment Income Tax, and depreciation recapture. It does not eliminate them; the deferred liability carries into the replacement property's basis.
Do I need a qualified intermediary for a New Hampshire 1031 exchange?
Yes. The intermediary must hold the proceeds and facilitate the exchange. Engage one before the relinquished property closes.
This page is general information, not tax or legal advice. We act as a qualified intermediary and do not provide tax or legal advice. State and federal rules and thresholds change; confirm current figures with your tax advisor.
