New Hampshire has no personal capital gains tax on real estate: there is no broad income tax, and the old interest and dividends tax is repealed for periods beginning after December 31, 2024. That means a 1031 exchange in New Hampshire is mainly about deferring federal tax, which is still $76,400 on a typical $300,000 gain. The state-only catch is the 7.5% business profits tax, which can reach rental owners and the gain when a business asset is sold.
Reviewed by Jon Hilley, CEO & Founder of 1031 Specialists. Last reviewed September 29, 2026.
| State tax on real estate gains | None for individuals; the business profits tax can apply to rental businesses above the filing threshold |
|---|---|
| Long-term capital gains treatment | No personal income tax; interest and dividends tax repealed after 2024 |
| Nonresident withholding at closing | None |
| Withholding form | Not applicable |
| Transfer or conveyance tax (a 1031 does not defer it) | $0.75 per $100 charged to the buyer and $0.75 per $100 to the seller (1.5% combined) |
| Clawback on out-of-state replacement property | No |
| Conforms to Section 1031 | No personal tax to conform; business taxes follow the federal gain computation |
| Property tax note | No sales or income tax, so local property taxes are high; model them on the replacement property |
Table of contents
- Is there a capital gains tax on real estate in New Hampshire?
- The New Hampshire business profits tax on rental property
- New Hampshire tax on a $300,000 gain: worked example
- No nonresident withholding in New Hampshire
- New Hampshire real estate transfer tax
- Conformity and clawback
- Moving into or out of New Hampshire
- Where 1031 exchanges happen in New Hampshire
- Federal 1031 rules that still apply
- Common New Hampshire 1031 exchange mistakes
- Start your New Hampshire 1031 exchange
- Frequently asked questions
- Sources
Is there a capital gains tax on real estate in New Hampshire?
Not for individuals. New Hampshire never adopted a tax on wages or capital gains, and the interest and dividends tax, which never touched real estate gains anyway, is gone for taxable periods beginning after December 31, 2024. A New Hampshire resident who sells a rental and pays federal tax owes nothing to the state on that gain as an individual.
Federal tax is the whole story for most sellers: up to 20% on long-term gain, up to 25% on unrecaptured §1250 depreciation, and 3.8% net investment income tax above $250,000 of joint income. Use the depreciation recapture calculator to see how much of your gain sits in the 25% layer.
The New Hampshire business profits tax on rental property
This is what makes New Hampshire different from other no-income-tax states. The business profits tax (BPT) is 7.5% for taxable periods ending on or after December 31, 2023, and it applies to business organizations, including sole proprietors, whose gross business income exceeds the filing threshold ($103,000 for 2023 and 2024, indexed since). The Department of Revenue Administration treats rental real estate as a business activity: proprietors report net rental profit from federal Schedule E on the NH-1040, and gain from the sale of business assets reported on federal Form 4797 is part of business profits.
So an investor with a sizable rental portfolio, or an LLC or partnership that owns commercial property, can owe BPT on the gain when a building is sold. Because the BPT calculation starts from federal figures, a 1031 exchange that defers the federal gain generally keeps it out of business profits as well. Confirm with your New Hampshire CPA, since state and federal adjusted basis can differ. The separate business enterprise tax may also apply to larger operations.
New Hampshire tax on a $300,000 gain: worked example
Assumptions: a $300,000 long-term gain on investment property, $100,000 of it unrecaptured §1250 depreciation, married filing jointly, already in the top federal bracket, owned personally and below the BPT filing threshold.
| Tax | Math | Amount |
|---|---|---|
| Unrecaptured §1250 gain (depreciation) | 25% x $100,000 | $25,000 |
| Remaining long-term gain | 20% x $200,000 | $40,000 |
| Net investment income tax | 3.8% x $300,000 | $11,400 |
| Federal subtotal | $76,400 | |
| New Hampshire income tax | No personal tax on gains | $0 |
| Total deferred by a full 1031 | $76,400 |
If the property is owned by a business above the threshold, add up to 7.5% BPT on the business gain ($22,500 on $300,000 before any apportionment). Compare paths in the capital gains vs. 1031 comparison.
No nonresident withholding in New Hampshire
Unlike Maine, Vermont and Massachusetts, New Hampshire does not require the buyer or closing agent to withhold anything when a nonresident sells. A Massachusetts owner of a Lake Winnipesaukee rental walks away with full proceeds at closing, apart from federal FIRPTA if the seller is a foreign person (see FIRPTA for foreign sellers). The seller's home state may still tax the gain, which is a reason to exchange even though New Hampshire itself does not.
New Hampshire real estate transfer tax
The real estate transfer tax is $0.75 per $100 of the price, imposed on both the buyer and the seller, so the combined cost is 1.5%. On a $1 million sale, each side pays $7,500. Buyer and seller each file a declaration of consideration.
A 1031 exchange does not defer this tax. You pay your share on the sale and your share again on a New Hampshire replacement property, so a $1 million sale followed by a $1.2 million purchase costs you $16,500 in transfer tax. Build that into your reinvestment budget.
Conformity and clawback
With no personal income tax, there is nothing to claw back and no New Hampshire form to track out-of-state replacement property. The issue runs the other way: if you exchange Massachusetts or Maine property into New Hampshire, those states can still claim the deferred gain later. Massachusetts in particular requires nonresidents claiming 1031 relief to consent to its jurisdiction; see 1031 exchanges in Massachusetts.
Moving into or out of New Hampshire
Moving to New Hampshire before selling does not erase another state's claim on real estate located there, because gain on real property is taxed where the property sits. It does help with property located in New Hampshire, and with the eventual sale of replacement property bought after you move. Investors leaving New Hampshire should know that their new state will tax the future sale of replacement property as a resident. Check Maine and Vermont for neighboring rules.
Where 1031 exchanges happen in New Hampshire
Nashua, Manchester, Salem and the Seacoast around Portsmouth see most multifamily and industrial exchanges, fed by Boston-area buyers. The Lakes Region and White Mountains supply vacation rentals, which need a documented rental history to qualify. We have no New Hampshire city guides yet.
Federal 1031 rules that still apply
Identify replacement property within 45 days and close within 180 days of the sale. Proceeds must go to a qualified intermediary, not to you. Replace the full value and the debt to avoid taxable boot. Use the 45-day identification validator, the 1031 exchange calculator and our 1031 exchange guides.
Common New Hampshire 1031 exchange mistakes
- Skipping the exchange because there is no state tax. The federal bill alone can exceed 25% of the gain.
- Ignoring BPT on an LLC-owned building. Business gain above the threshold is taxable at 7.5%.
- Underbudgeting transfer tax twice. You pay 0.75% selling and 0.75% buying.
- Buying a replacement without modeling property tax. High local rates change the cash flow on a new purchase.
- Assuming a move here clears Massachusetts gain. The deferred gain stays tied to the state where the property sat.
Start your New Hampshire 1031 exchange
Bring us in before closing so the exchange agreement is signed in time. Start your exchange or book an intro call.
Frequently asked questions
How can I avoid capital gains tax on real estate in New Hampshire?
New Hampshire has no personal capital gains tax, so the tax to avoid is federal. A 1031 exchange through a qualified intermediary defers it, and holding until death can eliminate it through a basis step-up.
Does New Hampshire tax capital gains on real estate?
Not for individuals. The interest and dividends tax is repealed for periods beginning after December 31, 2024. Businesses, including some rental proprietors, can owe the 7.5% business profits tax on gains.
Is there nonresident withholding when selling New Hampshire property?
No. New Hampshire does not require withholding at closing for nonresident sellers.
How much is the New Hampshire real estate transfer tax?
It is $0.75 per $100 of the price charged to the buyer and another $0.75 per $100 to the seller. A 1031 exchange does not defer it.
Does the business profits tax apply to rental property?
It can. Rental real estate is reported as a business activity, and proprietors above the gross business income filing threshold owe 7.5% on business profits, including gain on business assets.
Sources
- NH DRA: Interest and dividends tax
- NH DRA: Real estate transfer tax
- NH DRA: Business profits tax FAQ
- NH DRA: NH-1040 instructions
Related: Massachusetts, Maine, Vermont, Florida and all 50 states.
General information only, not tax or legal advice. Confirm business tax treatment with a New Hampshire CPA.
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