1031 Exchange · Austin

1031 Exchange in Austin, TX

After Austin's big appreciation, owners defer the federal gain (Texas has no income tax) via a 1031 into DSTs.

$513,000Median value

-6.8%Year-over-year

5.0–6.0%Illustrative cap rate

Deferring the tax on a Austin sale

A 1031 exchange lets Austin investors sell appreciated real estate and reinvest into like-kind replacement property — commonly a Delaware Statutory Trust — deferring federal and Texas capital-gains tax while moving from active landlording to passive, institutional real estate.

Frequently asked questions

Does Texas tax capital gains?

No. Texas 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.

Is a 1031 exchange worth it if Texas has no income tax?

Yes. Even with no state tax, the federal bill on a large gain is substantial (up to 23.8%), and a 1031 into a DST defers all of it while moving you into passive, professionally managed real estate.

Does Texas recognize 1031 exchanges?

There is no Texas income tax to conform, so federal 1031 treatment governs. A qualifying exchange defers the federal gain in full.

Considering a 1031 exchange in Austin?Talk to an advisor