The short answer
For an individual, a 1031 exchange of New Hampshire property has no state income tax dimension: New Hampshire taxes neither wages nor capital gains, and its last tax on investment income, the Interest and Dividends Tax, was repealed effective January 1, 2025. The state's cost sits at the registry instead: a real estate transfer tax of $0.75 per $100 charged to the seller and separately to the buyer, with no exemption for like-kind exchanges. Property held through an LLC or other business organization can also be inside the 7.5% Business Profits Tax, which follows the federal deferral.
New Hampshire at a glance
| State tax on an individual's gain | None; no wage or capital gains tax; Interest and Dividends Tax repealed January 1, 2025 |
|---|---|
| Real estate transfer tax | $0.75 per $100 from the seller plus $0.75 per $100 from the buyer (RSA 78-B:1) |
| Entity-interest transfers | Transferring an interest in a real estate holding company is taxed too (RSA 78-B:1-a) |
| Declarations | Seller files CD-57-S, buyer files CD-57-P, within 30 days of recording (RSA 78-B:10) |
| Business Profits Tax | 7.5% on business organizations; follows the IRC as of Dec 31, 2018, including section 1031 |
| Withholding at closing | None; New Hampshire has no income tax to withhold |
| Property tax reliance | Property taxes were 64.7% of state and local revenue, highest in the US (2019 data) |
No New Hampshire income tax on the gain, and since 2025 none on investment income either
New Hampshire has never taxed wages or capital gains, and its Interest and Dividends Tax, which fell from 5% to 4% for 2023 and 3% for 2024, was repealed effective January 1, 2025 (RSA 77, repealed by 2021, 91:99, II). The final returns covered 2024 and were due April 15, 2025.
For an individual owner, an exchange of New Hampshire property therefore has no state income tax step: nothing is deferred, nothing is withheld, and boot or a missed 180-day deadline is a federal matter only.
The transfer tax hits the seller and the buyer separately at $0.75 per $100
RSA 78-B:1 imposes a tax on the sale, granting and transfer of real estate at $0.75 per $100 of consideration, or fractional part, on the purchaser and separately on the seller, for a combined $1.50 per $100. Each side pays a $20 minimum when the consideration is $4,000 or less, and the tax is computed to the nearest whole dollar.
Consideration is measured immediately after the transfer and includes money, property, services, forgiven obligations and assumed debt; a nominal recital such as '$10 and other valuable consideration' does not set the tax, and transfers made solely to obtain financing are excluded. On a $2,000,000 sale, the seller pays $15,000 and the buyer pays $15,000.
The RSA 78-B:2 exemptions are structural, not transactional: gifts meeting the three donative elements (IX), leases under 99 years (XX), a change in form of organization with identical ownership and consideration (XXI), and transfers between owners and an entity with identical ownership percentages and no consideration (XXII). A like-kind exchange is not exempt, so a New Hampshire relinquished deed and a New Hampshire replacement deed are each taxed.
- A $750,000 relinquished sale: $5,625 from the seller and $5,625 from the buyer.
- A $1,500,000 New Hampshire replacement deed: another $11,250 from you as purchaser.
- A DST interest is acquired without a New Hampshire deed, so no transfer tax arises on that side.
Selling the LLC instead of the deed does not escape RSA 78-B
The definition of a sale in RSA 78-B:1-a covers every contractual transfer of real estate or an interest in real estate, including transfers of interests in a real estate holding company, defined as an organization engaged principally in owning, holding, selling or leasing real estate that owns New Hampshire real estate.
An investor who structures the relinquished sale as a transfer of membership interests still triggers the tax on both parties. That matters for exchange planning because the federal rules look at the real estate, while New Hampshire taxes the entity-interest transfer as if the deed had moved.
CD-57-S and CD-57-P: the declarations due 30 days after recording
RSA 78-B:10 requires the purchaser and the seller each to file a declaration of consideration with the Department of Revenue Administration stating the price and the tax computed, no later than 30 days from the recording of the deed or the transfer, whichever is later. Under Rev 809.04 the seller files Form CD-57-S and the buyer files Form CD-57-P.
The declaration is prima facie evidence of the consideration paid, so the figure on your CD-57-S should match the settlement statement produced at the closing your qualified intermediary documents. Both forms can be filed through the Department's Granite Tax Connect portal or by mail.
Where a New Hampshire exchange is genuinely deferred: the 7.5% Business Profits Tax
New Hampshire's Business Profits Tax is 7.5% of taxable business profits (RSA 77-A:2) and applies to any business organization, a term RSA 77-A:1 defines to include proprietorships, LLCs, partnerships and real estate trusts carrying on business activity in the state. The filing threshold is $92,000 of gross business income in the statute, adjusted every two years for Northeast CPI, with the Department publishing the current figure.
For BPT purposes New Hampshire uses the Internal Revenue Code as in effect on December 31, 2018 (RSA 77-A:1, XX). Section 1031 for real property is part of that code, so a business organization that exchanges New Hampshire property defers the gain for BPT just as it does federally.
RSA 77-A:3 apportions real property rental income to wherever the property is physically located, which becomes relevant once the replacement property is elsewhere. The 0.55% Business Enterprise Tax (RSA 77-E:2) sits alongside the BPT for enterprises above its thresholds. Whether your ownership structure is a business organization is the first question to put to a New Hampshire CPA.
Property tax carries the state, so it carries the underwriting
Property taxes made up 64.7% of the money raised by state and local government in New Hampshire, the highest reliance in the country, in the 2019 Tax Foundation data cited by Citizens Count. Local property taxes fund most of public education.
For an exchange seller that cuts both ways: a New Hampshire replacement property's net operating income is shaped by a municipal tax rate that varies town by town, while a DST holding property elsewhere trades that exposure for the other state's income tax.
Replacement property
A New Hampshire seller in a DST: no home-state tax, but the trust's states may want a return
A traditional DST usually holds property outside New Hampshire, and each state generally taxes the rental income and eventual gain sourced to buildings within it. New Hampshire imposes nothing on an individual's share and needs no credit mechanism, so the DST state's tax is the only state tax in the picture.
If the relinquished property was owned by an LLC or other business organization above the BPT threshold, ask your CPA how the DST income and any later recognized gain are apportioned under RSA 77-A:3, since out-of-state real property income is sourced away from New Hampshire.
Since the Interest and Dividends Tax is gone, DST distributions reach a New Hampshire individual free of any state tax at home. Confirm the entity analysis with your CPA and the Department of Revenue Administration before choosing between a DST and the cash-out DST option. No CD-57 declaration is filed for the DST purchase either, because those forms attach only to transfers of New Hampshire real estate.
Questions investors ask about 1031 exchanges in New Hampshire
Does New Hampshire tax the gain if my exchange fails after the 180-day deadline?
Not for an individual owner; there is no state tax on capital gains. If the property was held by a business organization subject to the Business Profits Tax, the recognized gain enters taxable business profits at 7.5%.
What will the transfer tax be on a $1,200,000 Portsmouth building sold through an exchange?
$9,000 from the seller and $9,000 from the buyer, at $0.75 per $100 each. The exchange does not change the amount.
Do I owe New Hampshire tax on rental income from a DST that owns property in another state?
No. New Hampshire has no tax on an individual's interest, dividends or capital gains after the January 1, 2025 repeal; the other state may tax the income sourced there.
My property is in an LLC; does the Business Profits Tax apply to the exchange?
If the LLC is a business organization above the filing threshold, its profits are taxed at 7.5%, but the BPT follows the Code as it stood on December 31, 2018, so a valid section 1031 exchange defers the gain for BPT too.
Can I avoid RSA 78-B by selling my membership interests instead of deeding the building?
No. Transfers of interests in a real estate holding company are taxed to both parties as sales of real estate.
Sources
The rules above were checked against these publications on September 18, 2026. Rates and forms change; confirm the current version with your CPA and the New Hampshire tax agency before you close. This page is general information, not tax or legal advice.
- RSA Chapter 78-B, Tax on Transfer of Real Property (NH General Court)
- RSA Chapter 77-A, Business Profits Tax (NH General Court)
- RSA Chapter 77, Taxation of Incomes (repeal notation, eff. Jan. 1, 2025)
- RSA Chapter 77-E, Business Enterprise Tax (NH General Court)
- N.H. Admin. Code Rev 809.04, Forms CD-57-P and CD-57-S (LII)
- McLane Middleton, NH Interest and Dividends Tax Repealed as of January 1
- McLane Middleton, Real Estate Tax Considerations in New Hampshire
- Citizens Count, Property Taxes in New Hampshire