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Capital Gains Tax When Selling a Home in New Hampshire: 2026 Rules

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Capital Gains Tax When Selling a Home in New Hampshire: 2026 Rules

July 13, 2026

Tom DeMatteo

Written by Tom DeMatteo

Broker/Owner, Owl's Nest Real Estate · July 13, 2026 · Updated · 18 min read

Capital gains tax on selling a home in New Hampshire is $0 at the state level: New Hampshire has no capital gains tax, no tax on wages, and its Interest & Dividends tax was repealed starting in 2025. Federal tax still applies. On a main home you owned and lived in for 2 of the last 5 years, the first $250,000 of gain is tax-free ($500,000 if married filing jointly); gain above that, or on a second home, is taxed at 0%, 15% or 20% in 2026, depending on income.

This guide covers the 2026 federal numbers, the IRC §121 exclusion with worked examples, partial exclusions, cost basis, second homes and ski condos, inherited property, and the one NH tax every seller does pay at closing. We're a brokerage, not a tax firm, so treat it as a starting point and confirm your own numbers with a CPA.

In this guide

Key takeaways

  • New Hampshire charges no state tax on home-sale gains. It has no tax on wages, and the Interest & Dividends tax is repealed for taxable periods beginning on or after January 1, 2025.
  • Federally, IRC §121 excludes up to $250,000 of gain (single) or $500,000 (married filing jointly) on a main home you owned and lived in for at least 2 of the 5 years before the sale.
  • For 2026, long-term gains are taxed at 0% up to $49,450 of taxable income ($98,900 joint), 15% up to $545,500 ($613,700 joint), and 20% above that, plus a possible 3.8% net investment income tax.
  • Second homes and ski condos get no §121 exclusion, and depreciation taken while renting is taxed at up to 25% when you sell.
  • Inherited property gets a stepped-up basis under IRC §1014, which usually wipes out most of the gain on a prompt sale. NH has no inheritance or estate tax.
  • The NH real estate transfer tax ($0.75 per $100 from the seller under RSA 78-B) applies to every sale, whether or not you made a profit.

Does New Hampshire have a capital gains tax?

No. New Hampshire has no broad-based income tax, so the gain on your home sale owes nothing to the state. For years there was one asterisk: the Interest & Dividends tax, which never reached home-sale gains but did tax investment income. It was stepped down from 5% to 4% to 3% and then repealed for taxable periods beginning after December 31, 2024, and no 2025 return is required. New Hampshire also has no inheritance tax and no estate tax.

That advantage doesn't follow you out of state. If you live in Massachusetts and sell a New Hampshire property, Massachusetts taxes its residents' capital gains wherever the property sits. The same is true of most states with an income tax, so a nonresident seller should raise the home-state question with a CPA before listing.

What New Hampshire does charge is the real estate transfer tax under RSA 78-B: $1.50 per $100 of the sale price, split evenly between buyer and seller ($0.75 per $100 each). On a $535,000 sale, the seller's share is $4,013. It is a tax on the transfer itself, owed whether or not you made any profit. Our guide to who pays closing costs in New Hampshire, and how much, covers that side of the ledger line by line.

2026 federal capital gains tax rates and brackets

Gain on a home you owned for more than one year is long-term and taxed at 0%, 15% or 20%. Which rate applies depends on your total taxable income including the gain. A large sale can push part of the gain into a higher band. These are the 2026 thresholds from IRS Rev. Proc. 2025-32:

Filing status (2026)0% rate: taxable income up to15% rate: up to20% rate: above
Single$49,450$545,500$545,500
Married filing jointly$98,900$613,700$613,700
Head of household$66,200$579,600$579,600
Married filing separately$49,450$306,850$306,850

Three more federal layers can apply:

  • Net investment income tax (NIIT), 3.8%. It applies to taxable gain when modified AGI exceeds $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). These thresholds are set in the statute and are not adjusted for inflation. Gain excluded under §121 is not subject to NIIT.
  • Short-term gain. If you owned the home one year or less, the gain is taxed at ordinary income rates of up to 37%.
  • Depreciation recapture. Depreciation you took, or could have taken, on a rental or home office is taxed at up to 25% as unrecaptured §1250 gain.

The $250,000 / $500,000 home sale exclusion, with examples

For most homeowners, the federal picture is decided by Section 121 of the Internal Revenue Code. It lets you exclude up to $250,000 of gain if you file single, or $500,000 if you're married filing jointly, on the sale of your main home. According to IRS Publication 523, you generally qualify if:

  1. Ownership: you owned the home for at least 24 months of the 5 years before the sale.
  2. Residence: you lived in it as your main home for at least 24 months (730 days) of those 5 years. The time does not have to be continuous.
  3. Look-back: you haven't used the exclusion on another home sale in the 2 years before this one.

For the $500,000 joint amount, either spouse can meet the ownership test, but both must meet the residence test. A surviving spouse who hasn't remarried can still claim up to $500,000 if the home sells within 2 years of the spouse's death. Military and Foreign Service members on qualified extended duty can suspend the 5-year clock for up to 10 years. There is no age-based exemption; the old one-time over-55 exclusion ended in 1997.

Example 1: gain fully covered by the exclusion

A Plymouth couple bought their home for $310,000 in 2015, added a $40,000 addition, and sells in 2026 for $560,000. Adjusted basis: $310,000 + $40,000 = $350,000. Gain: $560,000 − $350,000 = $210,000, before selling costs. Married filing jointly, their $500,000 exclusion covers all of it. Federal capital gains tax: zero, and nothing to New Hampshire either.

Example 2: gain that exceeds the exclusion

A single seller bought a Lakes Region home decades ago for $120,000, put $80,000 of documented improvements into it, and sells for $700,000. Adjusted basis: $200,000. Gain: $500,000, before selling costs, which would reduce it. The $250,000 exclusion covers half. If the seller's other taxable income is about $80,000, total taxable income stays under the 2026 single 15% ceiling of $545,500, so the remaining $250,000 is taxed at 15%: $37,500. With modified AGI of about $330,000, NIIT applies to the $130,000 above the $200,000 threshold, adding about $4,940. Every dollar of documented improvements trims that bill, which is why the basis section below matters.

New Hampshire home exterior representing a professional home valuation
The tax math starts with one number you can pin down today: what your home is actually worth.

Selling before two years: the partial exclusion

If you have to sell before reaching 24 months, you may still get a reduced exclusion when the main reason is one of three kinds of event recognized in Publication 523:

  • Work: a new job, or a transfer, at least 50 miles farther from the home than your old workplace was.
  • Health: a move to obtain, provide or facilitate care for an illness or injury, for you or a qualifying family member.
  • Unforeseeable events: for example death, divorce, a job loss that leaves you eligible for unemployment, multiple births from one pregnancy, or the home being destroyed or condemned.

The math: take the shortest of your months of ownership, months of residence, or months since you last used the exclusion. Divide by 24 and multiply by $250,000 (per eligible spouse). A single owner who lived in a Plymouth home for 12 months, then took a job in Pennsylvania, can exclude up to 12 ÷ 24 × $250,000 = $125,000. The limit applies to the exclusion, not the gain, so a modest gain on a short hold is often fully covered.

How to calculate your gain: basis and improvements

The formula is sale price − selling costs − adjusted basis = gain. Recording that paperwork carefully is the cheapest tax planning there is.

  • Adjusted basis starts with what you paid. Add most purchase closing costs (title insurance, recording fees, your share of the transfer tax when you bought) and every capital improvement: a new roof, an addition, a septic replacement, a kitchen renovation, a standby generator, a well, a dock.
  • Repairs and maintenance don't count: painting, fixing a leak, servicing the furnace. Improvements that add value or extend the property's life do.
  • Selling costs reduce the gain: commission (the NH average is about 5.03% as of 2026, per Clever), your $0.75-per-$100 share of the transfer tax, legal and closing fees, and staging.
  • Depreciation reduces basis. If you ever rented the home or claimed a home office, allowed or allowable depreciation lowers your basis and can't be excluded under §121.

Keep a folder, paper or digital, with invoices for every improvement since the day you bought. Many New Hampshire owners have held their homes for twenty or thirty years of appreciation, and tens of thousands of dollars of documented improvements can decide whether a sale fits under the exclusion. If your records are thin, building permits are public records at the town office, so a visit to the Campton or Thornton town hall can document a 2009 addition that was never invoiced cleanly. Pair permits with bank statements and let your CPA judge what's supportable.

Adjacent vacant land you used as part of the home can be included in the exclusion if it and the house sell within 2 years of each other. Land you held separately as an investment can't; our guide to selling land in New Hampshire covers that case. Since the whole calculation hangs on the sale price, find out what your home is worth early.

Estimate your capital gains tax on a NH home sale in four steps

You can rough out the federal number before you list. New Hampshire adds nothing to it, so this is the whole calculation:

  1. Net sale price. Expected price minus selling costs: commission, your $0.75-per-$100 share of the transfer tax, attorney and title fees. On a $600,000 sale with a 5% commission, $4,500 of transfer tax and about $2,100 of fees, that's about $563,400.
  2. Adjusted basis. What you paid, plus purchase closing costs, plus documented capital improvements, minus any depreciation. Say $250,000 + $5,000 + $45,000 = $300,000.
  3. Gain and exclusion. $563,400 − $300,000 = $263,400 of gain. A married couple who lived there 2 of the last 5 years excludes up to $500,000, so nothing is taxable. A single owner excludes $250,000, leaving $13,400 taxable.
  4. Rate. Apply the 2026 long-term rate that fits your total taxable income: 0%, 15% or 20% (table above), plus 3.8% NIIT only if modified AGI is above $200,000 single or $250,000 joint. At 15%, the single owner's $13,400 costs about $2,010.

Every input except the price is already in your files. The price is the one to pin down early, which is what a free home valuation is for, and our recent sales show what homes we listed actually closed for. The NH closing costs guide linked above breaks down the selling costs in step 1 line by line.

Selling a New Hampshire home and moving out of state

Because New Hampshire has no capital gains tax, the sale itself owes the state nothing whether you stay or leave. Two things change when you move, though. First, the federal §121 exclusion doesn't care where you go next: it depends only on the 2-out-of-5-year ownership and residence tests for the home you sold. Second, if you establish residency in a state that taxes capital gains before the sale closes, that state may claim the gain. Sellers relocating to Massachusetts, Vermont, Maine or another income-tax state should ask a CPA whether to close before changing residency. Nonresidents who own NH property face the mirror image: NH doesn't tax the gain, but the home state usually does.

Second homes, ski condos and rentals

Vacation property is a large share of this market: Waterville Valley condos, Lakes Region cottages, White Mountains getaways. The rule is simple: the §121 exclusion does not apply to a second home. The entire gain is taxable at the long-term rates above if you've owned the property more than a year, with most sellers landing at 15%. Higher earners may owe the 3.8% NIIT on top. If you are weighing whether to sell now, current New Hampshire homes for sale show what yours would be competing with.

A worked example: a couple bought a Waterville Valley condo in 2012 for $220,000, put in $30,000 of improvements, and sells in 2026 for $480,000 with $30,000 of selling costs. Taxable gain: $480,000 − $250,000 − $30,000 = $200,000. At 15%, that's $30,000 of federal tax. If their modified AGI tops $450,000 (the $250,000 joint threshold plus the whole gain), NIIT adds the full $7,600; at lower incomes it adds less or nothing. No New Hampshire tax on any of it, but the federal bill belongs in your net-proceeds math from the start.

If the property has been rented, depreciation recapture applies: depreciation you claimed, or were entitled to claim, is taxed at up to 25% at the sale, separately from the regular rates. The 8.5% NH Meals & Rentals tax you collected on stays under 185 days is an operating tax, not a tax on the sale. What your CPA will want at listing time is your depreciation schedules. Our guide to selling a short-term rental in New Hampshire covers the rest of that process.

Three planning notes for second-home owners:

  1. 1031 exchange. Genuine rental or investment property can defer the gain by exchanging into other investment real estate. You must identify the replacement within 45 days and close within 180 days, through a qualified intermediary. A 1031 exchange is not available for a personal-use vacation home, and mixed-use cases need professional advice.
  2. Converting to a primary residence. Moving into a second home for two years before selling doesn't unlock the full exclusion. Gain is prorated for "nonqualified use" after 2008 (periods when neither you nor your spouse lived there as a main home), so the benefit is usually smaller than owners hope.
  3. The second-home tax proposal is dead for now. A 2026 bill to add a 0.75% surcharge on non-primary homes worth over $500,000 was rejected by the NH House 284–55 on February 12, 2026.

Our guide to selling a lake house or second home in NH goes deeper, and our short-term rental analysis can help you compare holding against selling with real numbers.

Second home in the White Mountains of New Hampshire surrounded by trees
Ski condos and lake cottages get no primary-residence exclusion, so the whole gain is subject to federal tax.

Inherited property: the stepped-up basis

Inherited real estate usually carries far less tax than heirs fear. Under IRC §1014 it receives a stepped-up basis: your cost basis resets to the property's fair market value on the date of death, not what the deceased paid decades ago. Sell soon after inheriting and the taxable gain is often small, because appreciation during the deceased's lifetime is never taxed as capital gain. Inherited property is also treated as held long-term, however soon you sell. New Hampshire adds no inheritance or estate tax.

Document the date-of-death value with an appraisal or broker price opinion, because your basis depends on that number. The probate side (court authority to sell, timelines and out-of-state heirs) is covered in our guide to selling an inherited house in New Hampshire. A NH probate attorney should confirm the executor's authority before you list.

Taxes on selling a house in NH: what you'll actually deal with

TaxApplies in NH?Notes
NH capital gains taxNoNo tax on wages or gains; the I&D tax is repealed for periods beginning on or after 1/1/2025
Federal capital gains taxYes§121 may exclude $250K / $500K on a main home; 0/15/20% long-term rates otherwise (2026 brackets above)
Net investment income taxPossibly (federal)3.8% on taxable gain above $200K / $250K MAGI; not on excluded gain
Depreciation recapture (if ever rented)Yes (federal)Allowed or allowable depreciation taxed at up to 25% (unrecaptured §1250 gain)
NH real estate transfer taxYes$0.75 per $100 from the seller and the same from the buyer under RSA 78-B, whether or not you made a profit ($4,013 seller share on $535,000)
Prorated property taxesYesYour share of the town bill through closing, which is a closing cost, not a gains tax. See NH property taxes explained
NH inheritance / estate taxNoNone; inherited property also gets a federal stepped-up basis under IRC §1014
Home-state income tax for nonresidentsPossiblyYour state of residence (e.g., Massachusetts) may tax the gain even though NH doesn't

Reporting the sale and when to bring in a CPA

If your whole gain is excluded and you didn't receive a Form 1099-S, you generally don't report the sale on your federal return. You must report it on Form 8949 and Schedule D if part of the gain is taxable or if you received a 1099-S. The closing agent can skip the 1099-S when the price is $250,000 or less ($500,000 for a married couple) and you certify in writing that the full gain is excludable. Keep your purchase and sale closing statements, every improvement invoice, and any depreciation schedules for at least three years after you file the return that reports the sale.

Bring in a CPA before listing, not at tax time, if any of these apply:

  • your gain may exceed the exclusion;
  • the property is a second home, a rental or mixed-use;
  • you're selling before the 2-year mark;
  • you're weighing a 1031 exchange;
  • you inherited the property, or hold it in a trust or LLC;
  • you live in a state that taxes capital gains.

Frequently asked questions

Does New Hampshire have a capital gains tax?

No. New Hampshire has no state income tax on wages and no state capital gains tax, and the Interest & Dividends tax is repealed for taxable periods beginning on or after January 1, 2025. Your home-sale profit owes nothing to the state. Federal capital gains tax still applies to any gain not covered by the IRC §121 exclusion, and the NH real estate transfer tax is still due at closing.

Is there capital gains tax on selling a house in NH?

Not from the state. New Hampshire charges 0% on the profit from selling a house, whether it's a primary home, a second home or a rental. The only state tax tied to the sale is the real estate transfer tax: $0.75 per $100 of the price from the seller, and the same from the buyer. Federal capital gains tax can apply to gain above the $250,000 / $500,000 home-sale exclusion.

How much is capital gains tax on a home sale in New Hampshire?

State: zero. Federal: on a main home, up to $250,000 of gain (single) or $500,000 (married filing jointly) is excluded if you owned and lived in it 2 of the last 5 years. Gain beyond that, and all gain on second homes, is taxed at 0%, 15% or 20%. For 2026, the 15% rate runs to $545,500 of taxable income for single filers and $613,700 for joint filers, and a 3.8% NIIT may apply to high earners.

How can you avoid capital gains tax when selling a house in New Hampshire?

Qualify for the §121 exclusion by owning and living in the home 2 of the last 5 years. If you must sell early for a job, health or other unforeseeable reason, claim a partial exclusion. Document every capital improvement to raise your basis, and subtract selling costs like commission and your share of the transfer tax. For genuine investment property, consider a 1031 exchange. The NH transfer tax applies no matter what.

How long do you have to live in a house to avoid capital gains tax?

Two years. To claim the full federal exclusion you must have owned the home and lived in it as your main home for at least 24 months of the 5 years before the sale; the months don't have to be consecutive. You also can't have used the exclusion on another home in the previous 2 years. New Hampshire has no residency rule of its own, because it doesn't tax the gain.

Is there a capital gains exemption for seniors in New Hampshire?

No, and none is needed at the state level, since New Hampshire doesn't tax the gain at any age. Federally, the one-time over-55 exclusion ended in 1997; seniors use the same $250,000 / $500,000 exclusion as everyone else. For heirs, inherited property gets a stepped-up basis, which often wipes out most of the gain.

What if you sell a house before living there two years?

You may still get a partial exclusion if the main reason for selling is a new job at least 50 miles farther away, a health reason, or an unforeseeable event such as death, divorce or job loss. Divide your qualifying months by 24 and multiply by $250,000 per eligible spouse. Twelve months of qualifying use, for example, allows up to $125,000 of excluded gain for a single filer.

Do you pay capital gains tax when selling a second home or ski condo in NH?

There's no NH tax, but federally, yes. Second homes get no §121 exclusion, so the full gain above your adjusted basis and selling costs is taxed at long-term rates if you held the property over a year. Any depreciation claimed while renting is recaptured at up to 25%. A 1031 exchange can defer tax on genuine investment or rental property, but not on a personal-use vacation home.

What taxes do you pay when selling a house in NH?

At closing, you pay the NH real estate transfer tax ($0.75 per $100 of the price from the seller under RSA 78-B, or $4,013 on a $535,000 sale) and your prorated property taxes. After the sale, you pay federal capital gains tax on any gain not covered by an exclusion, plus depreciation recapture if the home was ever rented. There is no New Hampshire tax on the gain itself.

Do you pay capital gains on an inherited house in New Hampshire?

Usually little or none if you sell soon after inheriting. Inherited property gets a stepped-up basis under IRC §1014 to its fair market value on the date of death, and it counts as long-term however soon you sell. New Hampshire has no inheritance or estate tax. Document the date-of-death value with an appraisal and confirm the details with a CPA and a probate attorney.

Do I owe NH tax if I sell my house and move out of state?

No. New Hampshire doesn't tax the gain whether you stay or leave. The risk is the state you move to: if you become a resident of a state with an income tax before the sale closes, that state may tax the gain. The federal exclusion still applies as long as you met the 2-of-5-year tests on the New Hampshire home.

Start with the number everything depends on

Every calculation on this page starts with your sale price, and that's the input we can help you pin down today. Get a free professional home valuation and we'll pair it with a realistic net sheet: transfer tax, closing costs, commission options, and where the federal exclusion likely leaves you. For the full selling process, see our 10-step guide to selling a house in NH, the home seller's guide to New Hampshire and the sellers page. To check prices and timing in our NH housing market forecast for 2026, or to plan your sale, talk with our team. For the return itself, involve your CPA; we're glad to work alongside them.

This guide is general information for New Hampshire home sellers, not tax or legal advice. Figures are current as of October 2026, and tax rules change, so confirm the specifics of your situation with your CPA and your closing attorney.

Sources and further reading