New Hampshire Capital Gains Tax, Explained

New Hampshire's zero is a different kind of zero than most no-tax states. Texas and Florida have no income tax because they never built one. New Hampshire did have a state-level tax on individuals, the Interest and Dividends (I&D) Tax, but it was narrow by design: it reached interest and dividend income above modest thresholds, roughly $2,400 for a single filer or $4,800 for joint filers under prior law, and nothing else. It never touched wages, and it never touched a capital gain from selling stock, real estate, or a business. A founder selling a company or an investor selling appreciated shares owed New Hampshire nothing under the I&D Tax, before or after any of the changes described below.

In 2023, the legislature went further and repealed the I&D Tax entirely, effective for tax periods beginning January 1, 2025, under House Bill 2, signed by Governor Chris Sununu. Filers who owed I&D Tax for 2024 or an earlier year still had to file and pay it on the normal schedule, but starting with the 2025 tax year, the tax no longer exists. That closed New Hampshire's last individual-level tax of any kind. There was never a capital gains tax to repeal, because there was never a mechanism that reached capital gains in the first place.

Zero state income tax doesn't mean zero tax. The federal government taxes a gain the same in Manchester as in Boston, the federal capital gains brackets just become the whole income-tax bill instead of the first layer. Three federal pieces matter:

Worked example. A married couple in Manchester earns $150,000 in W-2 income and sells long-held index funds for a $300,000 gain. New Hampshire collects $0. Federally, the gain sits in the 15% bracket: $45,000. Their MAGI is $450,000, so the $200,000 of income above the $250,000 NIIT threshold picks up the 3.8% surtax: $7,600. Total bill: $52,600, about 17.5% all-in, and every dollar of it federal. The same sale in Massachusetts, right across the border, could add five figures of state tax on top.

One thing zero state income tax doesn't eliminate: the payment-timing problem. A six-figure gain usually means a quarterly estimated tax payment to the IRS in the quarter of the sale, Granite Staters skip the state voucher, not the federal one.

This is the part of New Hampshire's tax picture that catches sellers off guard, because it has nothing to do with your gain. New Hampshire charges a Real Estate Transfer Tax (RETT) on the sale price of real estate, not the profit, and it applies whether you made $5,000 or lost money on the sale. The rate is $0.75 per $100 of the price or consideration, charged separately to the buyer and to the seller, for a combined $1.50 per $100 (1.5%) of the transaction split between the two parties. On transfers of $4,000 or less, a minimum tax of $20 applies to each party. The tax is authorized under RSA 78-B and collected at closing, typically through the closing attorney or title company.

Worked example. You sell a Lakes Region property for $600,000. Your half of the RETT, the seller's side, is $0.75 per $100 of that price: $4,500, due at closing regardless of whether you had a $10,000 gain or a $200,000 gain on the sale. The buyer separately owes their own $4,500. Neither side of that $9,000 combined tax touches your income tax return, it's a transaction cost on the sale price, not a tax on your profit, and it stacks on top of whatever federal capital gains tax and depreciation recapture apply to your actual gain.

Some transfers, certain transfers between spouses, transfers incident to divorce, and transfers involving specific trust or government structures among them, qualify for statutory exemptions. Those exemptions are fact-specific, so if a transaction looks like it might qualify, that's worth confirming before closing rather than assuming.

For New Hampshire, "move here before you sell" usually means moving from Massachusetts, and the border runs through commuting distance of Boston for a huge share of the people who consider it. It genuinely works, for the right assets, on the right timeline. But the tax you escape is governed by your origin state's rules, not by anything New Hampshire does. New Hampshire will never tax your gain; the only question is whether Massachusetts, or wherever you're leaving, still can.

• Stock and most intangibles are generally sourced to where you live on the sale date. Sell after a genuine move to New Hampshire and Massachusetts usually has no claim on the gain.
• Real estate never moves. A Massachusetts property stays Massachusetts-taxable no matter where the owner lives when the sale closes, and it owes New Hampshire's Real Estate Transfer Tax too if the property itself sits in New Hampshire, RETT follows the property's location, not the seller's residence.
• Installment notes carry their origin. Payments from a sale made while you were a Massachusetts resident generally keep that state's character, year after year, no matter where you live when the checks arrive.

Worth noting separately from the capital gains question: New Hampshire residents who commute to Massachusetts, or work remotely for a Massachusetts employer, can still owe Massachusetts income tax on those wages even while living tax-free in New Hampshire. That's a wage-sourcing issue, not a capital gains issue, but it's part of the same border-planning conversation for a lot of New Hampshire households.

This is where New Hampshire's zero stops being the whole story for a business sale. If you sell business assets through an entity doing business in New Hampshire, that entity can owe the Business Profits Tax (BPT), regardless of what happens to your personal capital gains rate. BPT is 7.5% of taxable business profits, and a return is required once the entity's gross business income from all activities exceeds $109,000. If a business sale is structured as an entity-level asset sale, the gain from that sale can flow into the entity's business profits for the year and be taxed at 7.5%, on top of whatever the owners separately owe federally on their personal gain.

The second entity-level tax is the Business Enterprise Tax (BET), 0.50% of the enterprise value tax base, which is the sum of compensation, interest, and dividends the business paid or accrued during the year. A BET return is required once gross receipts or that enterprise value base exceeds $298,000. BET and BPT are meant to work together rather than fully stack, New Hampshire generally allows a credit against BPT for BET paid, but the two taxes are filed and calculated separately, and a business sale that spikes compensation or profits in the sale year can trigger both regardless of the personal-level 0% capital gains rate.