New Hampshire has no state income tax, so selling appreciated real estate is taxed only at the federal level — still 23.8% on the gain. A 1031 exchange into a Delaware Statutory Trust lets New Hampshire investors defer that federal tax and convert active rentals into passive, professionally managed real estate without giving up a chunk of the proceeds.
23.8%Est. combined tax if you sell
0%Top state rate on gains
5.0–7.0% (illustrative)Illustrative cap rates
How New Hampshire taxes a property sale
State treatment. No state income tax — capital gains are not taxed at the state level.
Nonresident withholding. None at the state level.
Does New Hampshire conform to Section 1031?
Yes — a qualifying exchange defers state tax alongside federal.
New Hampshire levies no personal income tax, so a sale is taxed only federally; a 1031 exchange still defers the federal 20% capital-gains rate plus the 3.8% net investment income tax.
Passive replacement property with a DST
Many New Hampshire owners use a Delaware Statutory Trust as replacement property — institutional real estate, professionally managed, that qualifies for 1031 treatment and can absorb both the equity and the debt from the sale.
No. New Hampshire has no personal income tax, so capital gains from selling real estate are not taxed at the state level. You still owe federal tax — the 20% long-term rate plus the 3.8% net investment income tax, about 23.8% on the gain — which a 1031 exchange can defer.
Does New Hampshire recognize 1031 exchanges?
With no New Hampshire income tax to conform, federal 1031 treatment governs, and a qualifying exchange defers the federal gain in full.
Why use a 1031 exchange in New Hampshire?
To defer the tax on a large gain (the federal bill alone can reach 23.8%) and move from active landlording into passive, professionally managed real estate while keeping your full equity invested. These are Regulation D offerings for accredited investors.