Does New Hampshire have a capital gains tax?
No. New Hampshire has no personal income tax on wages or capital gains, so an individual who sells stock, a home or a rental building owes no New Hampshire income tax on the gain. The only individual income tax the state had, the Interest and Dividends Tax under RSA 77, was repealed effective January 1, 2025, according to the Department of Revenue Administration (DRA).
New Hampshire capital gains tax questions on real estate come down to two other taxes. The Business Profits Tax (BPT) and the Business Enterprise Tax (BET) apply to business organizations, and the DRA’s BPT instructions treat a proprietor conducting rental activity as a business. The real estate transfer tax applies to the deed itself. Both are covered below.
The Interest and Dividends Tax repeal in 2025
The Interest and Dividends Tax was 3.0% for taxable periods ending on or after December 31, 2024 and 0% for periods beginning after that, per the DRA’s 2025 overview of state taxes. It never applied to capital gains on real estate, but it did reach interest income.
That matters for one kind of sale. A seller who carried back a note used to owe I&D tax on the interest. From 2025 on, interest on a seller-financed note is free of New Hampshire tax for an individual. On a $1 million note at 10%, that is $100,000 of interest a year, which at the old 3% rate would have cost close to $3,000 after the small I&D exemption.
When the Business Profits Tax applies to a building sale
The BPT applies at 7.5% to taxable business profits of every enterprise organized for gain carrying on business activity in New Hampshire, and the DRA says a return is required when gross business income from all activities exceeds $109,000 for periods beginning January 1, 2025. RSA 77-A:6 adjusts the threshold for inflation every two years, so the same figure applies to 2026 periods.
Rental owners are not exempt because they own in their own names. The DRA’s NH-1040 instructions, the BPT return for proprietorships, cover a proprietorship “conducting business activity as a business, profession, rental, or farm,” report net rental profit from federal Schedule E and report gain on the sale of business assets from federal Form 4797. Single-member LLCs taxed as proprietorships file the same return, and partnerships and LLCs taxed as partnerships file their own.
So a landlord whose building produces enough gross business income to cross the threshold reports the sale on a BPT return, and the gain is part of business profits. How much BPT is actually due depends on deductions and adjustments your preparer applies, including the adjustment where New Hampshire basis differs from federal basis. Installment sellers stay business organizations until every installment is reported.
The Business Enterprise Tax
The BET is a separate 0.55% tax on the enterprise value tax base of a business. A return is required when gross business receipts exceed $298,000 or the enterprise value tax base exceeds $298,000, for periods beginning January 1, 2025, per the DRA, and that inflation-adjusted figure carries through 2026. HB 155, enacted as 2026 N.H. Laws chapter 280, raises the BET filing threshold to $400,000 for periods beginning on or after January 1, 2027 (RSA 77-E:5).
The two business taxes use different bases and different thresholds, so a landlord can owe one, both or neither. Ask your CPA to run the BPT and the BET together for the year of sale rather than looking at either one alone.
| Tax | Rate | Who files | Applies to a rental sale? |
|---|---|---|---|
| Personal income tax on gains | None | No one | No |
| Interest and Dividends Tax | 0% from 2025 (repealed) | No one | No |
| Business Profits Tax | 7.5% | Gross business income over $109,000 | Yes, gain on business assets is reported |
| Business Enterprise Tax | 0.55% | Receipts or tax base over $298,000 | Possibly; ask your CPA |
| Real estate transfer tax | $0.75 per $100, each side | Buyer and seller | Yes, on the deed |
Real estate transfer tax on a New Hampshire sale
New Hampshire’s real estate transfer tax is $0.75 per $100 of the price or consideration, charged to the buyer and the seller separately under RSA 78-B. On a $2,000,000 sale, the seller pays $15,000 and the buyer pays $15,000, for $30,000 in total. The minimum tax is $20 on a price of $4,000 or less.
The transfer tax is a selling expense, so it reduces your gain for federal purposes. RSA 78-B:2 lists the exempt transfers, such as transfers to government, corrective deeds and some entity reorganizations with no change in ownership, and a sale to an unrelated buyer is not among them.
Federal capital gains tax for New Hampshire sellers
With no state income tax, federal tax is the main cost of a New Hampshire apartment sale. For 2026, IRS Revenue Procedure 2025-32 sets the 20% long-term rate above $613,700 of taxable income for joint filers and $545,500 for single filers. The 0% rate covers income up to $98,900 joint and $49,450 single, with 15% in between.
Depreciation you took comes back as unrecaptured Section 1250 gain at up to 25%, and recapture on assets reclassified in a cost segregation study is taxed at ordinary rates. The 3.8% net investment income tax applies to rental gains once modified adjusted gross income passes $250,000 joint or $200,000 single, unless you qualify as a real estate professional who materially participates.
Short-term vs long-term gains in New Hampshire
New Hampshire makes no distinction between short-term and long-term gains for an individual, because it taxes neither. The BPT does not have a lower rate for long-term gains either; business profits are taxed at 7.5% whatever the holding period.
The holding period still drives the federal bill. A building sold after one year or less is taxed federally at ordinary rates up to 37%, against a top long-term rate of 20%. If you are close to the one-year mark, waiting can save far more than any state planning.
Ways to lower the tax on a New Hampshire sale
With no individual income tax, the planning is mostly federal, plus a look at the BPT return.
- Exchange instead of selling. A 1031 into another building or a Delaware statutory trust defers federal tax and keeps the deferred gain off the BPT return.
- Use an installment sale. Spreading payments spreads federal gain, and from 2025 the interest on the note is free of New Hampshire tax. You remain a BPT filer until the last installment is reported.
- Hold until death. Heirs generally receive a stepped-up federal basis, which wipes out the built-in gain and recapture.
- Review the BPT return with your CPA before closing, including how your New Hampshire basis compares with federal basis.
Do nonresidents pay New Hampshire tax when they sell property?
A nonresident individual pays no New Hampshire income tax on the gain and faces no state withholding at closing. The state taxes that apply are the same for residents and nonresidents: the seller’s share of the transfer tax, and the BPT if the owner’s New Hampshire rental activity crosses the filing threshold.
Your home state may tax the gain. A Massachusetts resident selling a building in Nashua or Salem, for example, generally reports the gain to Massachusetts as a resident. Check your home state’s rules before you assume the sale is taxed only federally.
Worked example: selling a $2 million apartment building in New Hampshire
A married couple in Bedford owns a 20-unit building in Manchester in their own names and sells it in 2026 for $2,000,000. Selling costs are $95,000: an $80,000 commission and the seller’s $15,000 transfer tax. They paid $1,050,000 and have taken $410,000 of straight-line depreciation, so the adjusted basis is $640,000 and the gain is $1,265,000. Their other taxable income is $420,000.
Federal tax: the $410,000 of depreciation is taxed at 25%, or $102,500. The other $855,000 of long-term gain sits above $613,700 when stacked on their income, so it is taxed at 20%, or $171,000. The 3.8% net investment income tax on the full gain adds $48,070. Federal tax is $321,570.
New Hampshire income tax is $0. The couple’s rents put them over the $109,000 BPT threshold, so the sale goes on their BPT return. At 7.5%, $1,265,000 of gain could produce up to $94,875 of BPT before the deductions and adjustments their CPA applies, which is why the BPT return deserves as much attention here as the federal one.
| Item | Amount |
|---|---|
| Sale price | $2,000,000 |
| Selling costs, including $15,000 transfer tax | $95,000 |
| Adjusted basis ($1,050,000 less $410,000 depreciation) | $640,000 |
| Total gain | $1,265,000 |
| Unrecaptured 1250 gain at 25% | $102,500 |
| Long-term gain of $855,000 at 20% | $171,000 |
| Net investment income tax at 3.8% | $48,070 |
| Federal tax on the sale | $321,570 |
| New Hampshire income tax | $0 |
| BPT at 7.5% before deductions (upper bound) | $94,875 |
How a 1031 exchange changes the New Hampshire tax bill
A 1031 exchange defers the federal tax, and it also keeps the deferred gain off the BPT return, because the BPT starts from the gain figures on the federal return. In the example, buying a replacement worth at least $1,905,000, reinvesting all the net cash and replacing the debt would defer the $321,570 of federal tax and the BPT on the gain.
The exchange does not touch the transfer tax. RSA 78-B:2 has no exemption for like-kind exchanges, so the seller pays on the sale deed and, as buyer, pays again on the replacement deed if it is in New Hampshire. Our 1031 exchange in New Hampshire guide covers that cost, and the 1031 exchange rules page covers the 45-day and 180-day deadlines.
Selling a New Hampshire apartment building to Skyline
Skyline buys apartment buildings with five or more units in New Hampshire, from Manchester and Nashua to Concord, Dover and the Seacoast. We buy directly, close on your timeline, and can work inside 1031 deadlines. A set closing date lets your CPA plan the federal and BPT returns for the right year and line up an exchange if you want one.
Selling? Spread the tax with seller-carry terms
If a large tax bill is what is keeping you from selling, an installment sale may help. When you carry part of the price as a note, the gain is generally reported as you receive payments instead of all in the year of sale. Some parts of the gain, such as certain depreciation recapture, can still be due up front, so run the numbers with your CPA first.
Skyline Capital Investments buys apartment buildings with five or more units and can offer seller-carry terms, or a delayed closing that fits your 1031 timeline. Send the address and unit count and we typically respond within 48 hours. How seller financing works · How an installment sale is taxed · Seller financing calculator.
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