Selling a Lake House or Second Home in NH

Selling a lake house or second home in New Hampshire turns on four things: federal capital gains tax on the whole gain (the Section 121 home-sale exclusion does not apply), no state tax on that gain beyond the RSA 78-B transfer tax, a mandatory septic evaluation on most waterfront sales, and listing in the season that suits the property.

Each of those carries a dollar figure, and each is covered below: the tax math with a worked example, the September 2024 change to the waterfront septic law that still catches sellers off guard, the shoreland and dock records buyers ask for, what happened to the 2026 second-home surcharge, and how to time a lake sale versus a ski-condo sale. We list and sell lake houses, ski condos and mountain second homes from our offices in Campton and Plymouth, and we run vacation rentals in these towns ourselves. We are a brokerage, not tax advisors: the rules below are current as of September 2026, but confirm how they apply to you with your CPA and closing attorney. To start with the simplest number, find out what your home is worth with a valuation built from real waterfront and resort comps.

In this guide:

How a second-home sale is taxed
What happened to the 2026 second-home surcharge
When to list a lake house vs. a ski condo
The waterfront septic law, shoreland rules and docks
What drives the price of a NH lake house
Marketing to out-of-state buyers
If it earned rental income
The pre-listing document checklist
Frequently asked questions

Key takeaways:

Second homes get no Section 121 exclusion: the full federal gain is taxed at long-term rates of 0/15/20%, and a large gain can push you over the 3.8% net investment income tax threshold on its own.
New Hampshire takes no income tax on the gain. The seller's transfer tax under RSA 78-B is $0.75 per $100 of price: $4,013 on a $535,000 sale.
Past rental use adds depreciation recapture at up to 25%. A 1031 exchange is only open to property genuinely held as an investment, and it must be set up before closing.
Since September 1, 2024, the buyer of developed waterfront property must have the septic system evaluated by a state-licensed evaluator before transfer if any part of it is within 250 feet of the water (RSA 485-A:39). A seller's evaluation done within 180 days of transfer can be used instead.
The second-home surcharge in the January 2026 headlines was killed by the NH House, 284–55, in February 2026.

How is the sale of a second home taxed in New Hampshire?

At the state level, lightly. New Hampshire has no income tax on wages or capital gains, and the Interest & Dividends tax was repealed for tax periods beginning on or after January 1, 2025. The state's cut of your sale is the real estate transfer tax under RSA 78-B: $0.75 per $100 of the price from the seller and the same from the buyer, with a $20 minimum on each side. On a $535,000 sale the seller's share is $4,012.50, rounded to $4,013; on $850,000 it is $6,375. Our guide to seller closing costs in New Hampshire covers the rest of the settlement statement.

The federal side is where second homes part company with primary residences. The Section 121 exclusion lets a married couple filing jointly exclude up to $500,000 of gain ($250,000 single) on a home they owned and lived in for two of the last five years. It does not apply to a second home. Every dollar of gain on a vacation property is taxable at long-term rates of 0%, 15% or 20%, plus the 3.8% net investment income tax (NIIT) once modified adjusted gross income passes $250,000 for joint filers ($200,000 single). Because the gain itself counts toward that threshold, a lake-house sale often triggers NIIT for households that never pay it otherwise.

Moving into the lake house for two years before selling does not fully fix this. Since 2009, gain allocated to years the home was not your main residence ("nonqualified use") is excluded from the Section 121 benefit, so a converted second home only shelters a prorated share of its gain.

Which taxes apply to which kind of home

Tax or rule	Primary residence	Second home (personal use)	Rental / investment property
NH tax on the gain	None	None	None
Section 121 exclusion ($250k/$500k)	Yes, if owned and occupied 2 of the last 5 years	No (prorated at best if later converted)	No
Federal long-term capital gains (0/15/20%)	Only on gain above the exclusion	On the full gain	On the full gain
Net investment income tax (3.8%)	Possible on gain above the exclusion	Above $250k MAGI joint / $200k single	Above $250k MAGI joint / $200k single
Depreciation recapture (up to 25%)	No	Only if it spent time as a rental	Yes
1031 exchange deferral	No	Generally no	Yes, if structured before the sale
NH transfer tax, seller share (RSA 78-B, $0.75/$100)	Yes	Yes	Yes

A worked example

Say you bought a Lakes Region cottage in 2012 for $450,000, put $75,000 of documented capital improvements into it (a new septic system, a rebuilt deck, a renovated kitchen) and sell in 2026 for $850,000. Your adjusted basis is $525,000. Subtract about $45,000 of selling costs (commission, your $6,375 transfer-tax share, closing fees) and the gain is roughly $280,000. At the 15% rate most sellers land in, that is about $42,000 in federal capital gains tax. If your other income is $120,000, the sale lifts your MAGI to about $400,000, and NIIT applies to the $150,000 above the $250,000 threshold: another $5,700. Had this been your primary residence, a married couple would have owed nothing.

The figures are illustrative; your bracket, costs and records move the result. The two lessons hold for everyone: keep every receipt for capital improvements (they raise your basis dollar for dollar), and get a tax projection before you list. Our guide to capital gains tax when selling a home in New Hampshire covers the mechanics in depth.

If you rented it out: depreciation recapture

Depreciation claimed while the property was rented (or that you were entitled to claim) reduces your basis, and on sale that amount is taxed at up to 25%, separately from the rest of the gain. $60,000 of depreciation over eight rental years means up to $15,000 of recapture tax. Recapture applies even to depreciation you never deducted, so bring your depreciation schedules to the pre-listing tax conversation.

The 1031 option for true rentals

A 1031 like-kind exchange can defer the whole federal gain if the property was held for investment and the proceeds roll into another investment property through a qualified intermediary. You have 45 days from closing to identify replacement property and 180 days to close on it. A vacation home your family uses most summer weekends generally won't qualify. The IRS safe harbor in Revenue Procedure 2008-16 treats a dwelling as investment property if you owned it for 24 months before the exchange and, in each of those two years, rented it at fair market rent for at least 14 days while keeping personal use to the greater of 14 days or 10% of the days rented. If your lake house has run as a rental business, ask your CPA before you sign the purchase and sale agreement (the P&S, the binding contract in a New Hampshire sale), because the exchange has to be arranged before closing.

What happened to the 2026 second-home surcharge?

It was voted down. In January 2026, NHPR and the Concord Monitor reported on proposals to add a property-tax surcharge on second homes and rentals. The headline bill, from Rep. Jonah Wheeler of Peterborough, would have added a 0.75% levy on residential property worth more than $500,000 that is nobody's primary home. On February 12, 2026, the House rejected it 284–55. No second-home surcharge is on any New Hampshire tax bill as of September 2026.

The idea may return in a future session, and it says something about the politics of second homes in high-demand towns. But it is no reason to rush a sale. Decide on the fundamentals: how much your family uses the place, what it costs to carry, and what the equity would do elsewhere. If the lake house came to you through an estate, our guide to selling a probate house in New Hampshire covers who can sign the deed and the stepped-up basis first. The market itself is supportive. Per Roche Realty Group's first-half 2026 review, the Lakes Region single-family median rose 10.3% year over year to $535,000 with a median of 16 days on market, and Winnipesaukee waterfront posted a $2.3 million median with dollar volume up 43%. Waterfront took longer to sell, though: a median of 65 days, up from 37. Statewide figures are in our New Hampshire housing market 2026 report.

When is the best time to sell a lake house or ski condo in NH?

List when the property is easiest to fall in love with. Second homes are bought on emotion as much as spreadsheet, and the two main types run on opposite calendars.

Lake and waterfront: late spring through summer

A lakefront home wants to be photographed and shown with the dock in, the boat at the mooring and the outdoor furniture out. Buyers touring in July can picture the August they are buying. The same property in November, dock stacked on the lawn and the lake the color of slate, asks buyers to imagine what they can't see, and offers tend to reflect it. For a summer sale, start in late winter: photos, repairs and the septic evaluation all take lead time, and evaluators get booked up in spring. Our Ready-to-Sell Program can cover up to $2,500 in prep costs plus a pre-listing inspection for qualifying listings, settled at closing.

Ski condos: October through early season

A Waterville Valley or Loon-area ski condo runs the other way. Buyer urgency peaks from October through the first weeks of ski season, when families decide they are done renting for another winter and want keys before the holidays. A ski condo listed in April meets buyers who just put their skis away. Fall foliage brings a second wave of lookers to both property types, and plenty of lake and mountain purchases start with a leaf-peeping weekend.

Boats moored on a calm New Hampshire lake with wooded hills beyond — List a lake house when the water is working for you: dock in, boats out, summer visible from every window.

What do NH waterfront buyers inspect? Septic, shoreland, docks and access

Waterfront diligence is heavier than an in-town sale, and buyers, their agents and lenders arrive prepared. Getting ahead of these items is the cheapest negotiating leverage a lake seller can buy.

The waterfront septic evaluation (RSA 485-A:39, since September 2024)

The law changed on September 1, 2024, and many sellers still describe the old version (a seller-paid "site assessment" before the P&S, for systems within 200 feet). Under the current law, summarized by New Hampshire REALTORS and NHDES fact sheet SSB-14:

Question	Current rule
Which properties?	Developed waterfront property on a septic system where any part of the system is within 250 feet of the reference line of protected waters (lakes and ponds over 10 acres, fourth-order and larger rivers, designated rivers, tidal waters)
Who arranges it?	The buyer, at the buyer's expense, before the transfer. The seller must allow access.
Who performs it?	A New Hampshire licensed septic system evaluator
Can the seller's report be used?	Yes, if the evaluation was completed within 180 days of the transfer
Older systems	If the system was approved before September 1, 1989 or has no state approval, a permitted septic designer must also check the depth of the disposal area against the seasonal high-water table
If it has failed	It must be repaired or replaced within 180 days after transfer. Buyer and seller negotiate who pays.
Exemption	A buyer who will replace or remove the system within 180 days can skip the evaluation by notifying NHDES and the local health officer

In practice, sellers with an older or undocumented system often commission the evaluation themselves before listing, time it so it is still inside the 180-day window at closing, and price any repair in from the start. A failed system near the water is the classic deal-killer, and replacement in the protected shoreland needs state approval and can run well into five figures. Separately, New Hampshire requires written disclosure of the private water supply, sewage system and insulation (RSA 477:4-c and 4-d), a written flood-risk disclosure added by HB 1320 in 2024, and the RSA 477:4-a notifications on radon, arsenic, lead and, since January 1, 2025, PFAS. Our NH seller disclosure guide covers the full list.

Shoreland rules (RSA 483-B)

The Shoreland Water Quality Protection Act, formerly the Comprehensive Shoreland Protection Act, governs building, cutting and earth-moving within 250 feet of the reference line of those same protected waters. The zones a buyer's agent will ask about:

Distance from the reference line	What applies
0–50 feet (waterfront buffer)	Primary structures set back at least 50 feet; vegetation removal limited by a tree-and-shrub point system
50–150 feet (natural woodland buffer)	At least 25% of this area kept in an unaltered state
0–250 feet (protected shoreland)	Most construction, excavation and filling needs an NHDES shoreland permit; impervious cover above 20% of the lot's shoreland area needs a stormwater plan, and above 30% an engineered system

A sale doesn't trigger a shoreland review, but unpermitted work does surface in town and NHDES records, usually at the worst moment. Know what has been built, cut or paved near the water and keep the permits in a folder.

Docks and waterfront rights

The dock is often the most valuable few hundred square feet of the property. New docks and changes to existing ones need NHDES Wetlands Bureau approval, so expect buyers to ask whether yours is permitted or pre-dates permitting, whether it is seasonal or permanent, and whether it conveys. For lake-access homes, the deed language on beach, dock or mooring rights is the product; moorings on public waters are permitted separately by NH Marine Patrol, so confirm whether and how a mooring permit passes to a buyer before you advertise one. Pull dock permits, association documents and deed language before listing. A seller who can answer dock questions crisply keeps momentum.

Private roads and association documents

Many lake and mountain properties sit on private roads, and lenders routinely ask for a written road maintenance agreement (who plows, who grades, who pays) before they clear the file. If your road runs on a handshake, getting it in writing before listing saves weeks later. In resort communities like Waterville Valley or Owl's Nest, the association package (declaration, budget, reserves, rental rules) is part of what you are selling. Order it early: a slow condo-document turnaround stalls more resort closings than inspections do. In Waterville Estates, buyers will also ask for the district tax and water bills; our guide to selling a house in Campton NH covers that package.

What drives the price of a New Hampshire lake house?

Two houses of the same size on the same lake can sell hundreds of thousands of dollars apart. The factors buyers pay for, roughly in order:

Private frontage. Feet of owned shoreline, versus deeded access or a shared association beach.
Water and bottom. Depth at the dock, a sandy rather than rocky or mucky bottom, and swimmable water off the property.
Exposure and view. Southwest-facing sunsets and long views down the lake price above a north-facing cove.
Dock and boathouse. A permitted, deep-water dock or a grandfathered boathouse is hard to replicate under today's rules.
The lake itself. Winnipesaukee, Squam and Newfound sit in different price bands from smaller ponds; our guides to Lake Winnipesaukee, Squam Lake and Newfound Lake and our Lakes Region waterfront guide cover the differences, and the NH lake homes for sale page shows what is competing with yours right now.
Septic and lot. A compliant system and a buildable, level lot within the shoreland rules remove the biggest unknowns.

Waterfront comps are thin and each property is different, so pricing is a judgment built from recent sales on the same lake and the same kind of frontage. That is why we price from lake-specific sales rather than an automated estimate.

Your buyer probably lives out of state: market like it

Most buyers of New Hampshire second homes live in Massachusetts, elsewhere in New England or the New York metro, shopping online at night and touring on weekends. Two things follow. The listing photos, video and floor plans are the first showing, and often the only one before a buyer decides to make the drive. And the listing has to reach where those buyers search, which comes down to MLS syndication, digital marketing, and a brokerage that answers out-of-state inquiries seven days a week. You can see how we present lake and mountain properties in our recent sales.

If it earned rental income, document it conservatively

A rental track record widens your buyer pool: alongside vacation buyers, you draw buyers who want the place to help carry itself. It only helps when it is documented. Use actual statements and tax records, not projections, and give occupancy and gross figures a lender and accountant can verify. Stays of fewer than 185 consecutive days carry New Hampshire's 8.5% Meals & Rentals tax, and town short-term rental rules differ and keep changing, so note what is permitted. Never let a listing promise income; buyers discount hype. If the rental business is a large part of the value, our guide to selling a short-term rental in New Hampshire covers the booking history, licences and what transfers at closing. If you are weighing whether to keep renting instead, our short-term rental analysis puts numbers on the hold option, and our rental management team sees what these properties earn season by season. If the plan is to keep it as a year-round rental instead, our property management service handles the tenants, the maintenance and monthly owner payouts.

The pre-listing document checklist for a NH second home

Nearly every delay we see in a second-home sale traces back to a missing document. The stack to assemble before the listing goes live:

Deed, survey or plot plan, and any deeded beach, dock, mooring or right-of-way language
Septic system approval, design and pumping records, plus a recent evaluation by a licensed septic system evaluator if the system is within 250 feet of the water (RSA 485-A:39)
Well test results and any water treatment records
Shoreland (RSA 483-B) permits for past work within 250 feet of the water
Dock permit or approval, and any grandfathering documentation
Association documents: declaration, bylaws, current budget, reserves, rental rules
Road maintenance agreement for private roads (lenders ask)
Receipts for capital improvements and, if rented, depreciation schedules and rental statements
The statutory disclosures: water, septic and insulation (RSA 477:4-c and 4-d), flood risk, and the radon, arsenic, lead and PFAS notifications (RSA 477:4-a)

For the rules that apply to every sale, primary home or not, start with our guide to selling a house in New Hampshire; the step-by-step listing process is in our New Hampshire home seller guide.

Frequently asked questions

Do you pay capital gains tax when selling a NH lake house?

Not to New Hampshire: the state has no tax on capital gains, and the Interest & Dividends tax was repealed for periods beginning on or after January 1, 2025. Federally, a second home gets no Section 121 exclusion, so the full gain is taxed at 0/15/20%, plus 3.8% NIIT if the sale pushes income above $250,000 joint. Your basis (purchase price plus documented improvements) sets the gain, so gather those records and confirm the math with your CPA before listing.

Does a buyer need a septic inspection on NH waterfront property?

Yes, in most cases. Since September 1, 2024, RSA 485-A:39 requires the buyer of developed waterfront property to have a licensed septic system evaluator inspect the system before transfer if any part of it is within 250 feet of the water. The buyer may use the seller's evaluation if it was done within 180 days of transfer. A failed system must be repaired or replaced within 180 days after the sale.

When is the best time to sell a lake house in New Hampshire?

Late spring through summer. Buyers pay for the summer they can see: dock in the water, boat at the mooring, swimmers off the point. Start preparing in late winter so photos, repairs and the septic evaluation are done when the ice goes out. Ski condos run the opposite calendar, with peak buyer urgency from October into the first weeks of ski season, and fall foliage brings a second wave of lookers to both.

Is New Hampshire adding a tax on second homes?

Not as of September 2026. A January 2026 bill would have added a 0.75% surcharge on non-primary homes worth more than $500,000, but the NH House rejected it 284–55 on February 12, 2026. The idea could come back in a future session, so it is worth watching, but it is not on anyone's tax bill and is a poor reason to rush a sale. Decide on use, carrying costs and equity instead.

Can you do a 1031 exchange on a New Hampshire vacation home?

Only if it was genuinely held as an investment. The IRS safe harbor requires owning it 24 months before the exchange and, in each of those years, renting it at fair rent for at least 14 days while limiting personal use to the greater of 14 days or 10% of rented days. You then have 45 days to identify replacement property and 180 days to close, with proceeds held by a qualified intermediary. Talk to your CPA before signing the purchase and sale agreement.

How much is the transfer tax when selling a second home in NH?

Under RSA 78-B, New Hampshire charges $0.75 per $100 of the sale price to the seller and the same to the buyer, 1.5% combined, with a $20 minimum on each side. The seller's share is $4,013 on a $535,000 sale and $6,375 on an $850,000 sale. The rate is the same whether the property is a primary residence, a second home or a rental.

Get a real number on your lake house or second home

Every second-home sale starts with two questions: what is it worth, and what will you keep after taxes and costs? We can answer the first this week with a free professional valuation built from waterfront and resort comps, and help you frame the second for your CPA. See how we work on our sellers page or talk to our team.

This guide is general information for New Hampshire second-home sellers, not tax or legal advice. Rules change; confirm the specifics of your situation with your CPA and your closing attorney.

Selling a Lake House or Second Home in New Hampshire: Taxes, Timing & Buyers