Capital Gains Tax on a New Hampshire Vacation Home: Questions to Ask Before You List
Lisa Brouillette, REALTOR® | The Valley Realty | October 23, 2026
New Hampshire does not tax capital gains, so when you sell a vacation home here, the state takes nothing from your profit. That is only part of the picture, though. Capital gains tax on a New Hampshire vacation home is still owed to the IRS, and if you live in a state with an income tax, your home state may want its share too. How much you owe depends on details only your accountant can sort out, which is why the best time to have that conversation is before you list, not after an offer comes in.
I'm not a tax professional, and nothing here is tax advice. What I can do is help you walk into that accountant meeting with the right questions and the right paperwork, so the numbers don't surprise you at closing.
Key Takeaways
- New Hampshire won't tax your gain: The state has no capital gains or income tax, so the tax questions on a vacation home sale are federal and, for many owners, their home state.
- The primary home exclusion usually doesn't apply: The IRS exclusion that shields up to $250,000 or $500,000 of gain is for a primary residence, not a vacation home.
- Rental history changes the conversation: If the home was ever rented, depreciation and rental records come into play, and your accountant will need that history.
- Your records set your gain: The purchase closing statement and receipts for major improvements are what your accountant uses to figure your gain, so gather them early.
- Talk to your accountant before you list: Some answers, like which tax year the sale lands in, depend on timing you can still plan.
What New Hampshire Does and Doesn't Tax When You Sell
New Hampshire has no income tax and no capital gains tax, and as of January 1, 2025, it no longer has the old Interest and Dividends Tax either. Whatever profit you make on your vacation home, the state does not tax it.
The tax New Hampshire does collect on a sale is the real estate transfer tax. It is $15 per $1,000 of the sale price, paid at closing and divided between the buyer and the seller. On a $600,000 sale, that is $9,000 total, or $4,500 each. Because the transfer tax is based on the sale price rather than your profit, it is owed even if you sell for less than you paid. Your closing attorney or title company handles it at settlement, and our guide to buying a second home in Mt. Washington Valley explains how it works from the buyer's side.
Sources: NH Department of Revenue Administration, Real Estate Transfer Tax; NH Department of Revenue Administration, Repeal of NH Interest and Dividends Tax Now in Effect
Why Your Home State May Still Tax the Sale
Many vacation homes in the Valley belong to owners who live in Massachusetts, Connecticut, New York, New Jersey and other states with an income tax. New Hampshire not taxing the gain does not settle the question for them. States with an income tax generally tax their residents on income wherever it comes from, and that can include the profit on a home in another state.
That makes "Does my state tax this sale?" one of the most important questions to bring to your accountant, ideally one who prepares returns in the state where you live. The answer can change your real proceeds more than anything about the house itself, and it is easy to miss when every article about selling in New Hampshire leads with "no capital gains tax."
How the Gain on a Vacation Home Is Figured
Capital gains tax is based on your profit, not the sale price. The starting point is your cost basis, which is the accountant's term for what you have put into the home: what you paid for it, certain costs from your purchase closing and the major improvements you have made since. Cost basis is different from fair market value, which is what the home would sell for today. Your accountant works from the sale price back to the gain, and each line below depends on paperwork you either have or need to find.
| Line | What goes into it |
|---|---|
| Sale price | What the buyer pays for the home |
| Minus selling costs | Commission, attorney fees and other closing costs you pay at the sale |
| Minus cost basis | What you paid for the home, certain costs from your purchase closing, and major improvements made since |
| Equals your gain | The amount your accountant uses to figure any tax |
Source: IRS Publication 523, Selling Your Home
Improvements are where vacation homes often have more basis than the owner remembers. A new roof, a dock, an addition, a replaced septic system or a renovated kitchen can count. Routine repairs and upkeep generally do not. Over 15 or 20 years of owning a camp or ski house, those projects add up, but only if there are receipts, permits or invoices to show for them.
The primary home exclusion that lets many sellers keep up to $250,000 of gain tax-free, or $500,000 for a married couple, generally requires that the home was your main residence for two of the last five years. A vacation home used on weekends and holidays usually does not meet that test, so the full gain is typically on the table.
Congress is considering a bill, the More Homes on the Market Act, that would double those limits to $500,000 and $1 million. As of late September 2026 it was still in committee in both the House and the Senate. Because it changes the exclusion for a primary residence, it would not by itself change the rules for a vacation home, but it is one more thing to ask your accountant about if it becomes law.
Source: Inman, The 11 Most Consequential Housing Bills Going Into the Midterm Elections
Questions to Ask Your Accountant Before You List
These are the questions that tend to matter most for vacation home sellers in the Valley. Each one depends on your own history with the property, which is exactly why the answers belong to your accountant.
How long have I owned the home, and is the gain long-term?
The IRS treats a gain on property owned more than one year as long-term, which is taxed at lower rates than a short-term gain. Most Valley sellers have owned their place for years, but if you bought recently, the closing date relative to your purchase date can matter.
What is my cost basis, and which improvements count?
Bring your purchase closing statement and every improvement record you can find. Your accountant can tell you which projects add to your basis and which were repairs.
Did I ever rent the home, and how much depreciation was claimed?
If you rented the home and reported that income, depreciation was likely part of those returns. When you sell, the depreciation claimed is generally taxed at up to 25%, separately from the rest of the gain. Your accountant will need your past returns to figure it.
Will this sale push my income over the 3.8% surtax threshold?
The IRS applies an extra 3.8% Net Investment Income Tax when income passes $200,000 for single filers or $250,000 for married couples filing jointly, and gain on a second home counts toward it. A large sale can push an otherwise ordinary year over the line.
Is a 1031 exchange realistic for how I've used the property?
A 1031 exchange can defer tax when investment property is traded for other investment property, but a home used mainly by your family usually doesn't qualify. If yours has a real rental history and you plan to buy another investment property, ask whether it fits before you list, since the exchange has to be set up before closing.
I inherited this home. What is my basis?
Inherited property usually takes a basis equal to its value when the previous owner passed, not what they paid decades ago. Many Valley camps are being sold by the next generation, and that one detail can change the numbers a great deal. Ask your accountant how to document what the home was worth at that time.
When sellers bring me these answers early, we can plan the listing around them instead of scrambling after an offer comes in.
Sources: IRS Topic 409, Capital Gains and Losses; IRS Questions and Answers on the Net Investment Income Tax; IRS Publication 523; IRS Like-Kind Exchanges: Real Estate Tax Tips; IRS Gifts and Inheritances FAQ
Timing the Sale: The Tax Year and the Listing Season
For tax purposes, the date that usually matters is the closing, not the day you list. A home listed in October that closes in January generally lands in the next tax year, which can matter if this year already has a large bonus, a business sale or another gain in it. Your accountant can tell you whether one year is better than the other for you, and I can help you work backward from that to a realistic list date.
So far in 2026, single-family homes in Conway, Bartlett, Madison and Jackson have averaged 52 to 74 days on the market, and condos have averaged 56, according to our Q3 2026 market update. The closing comes after the offer, so a home listed in October or November can easily close in the new year.
The market has its own calendar. Ski-access homes, lake and summer places and four-season family homes each have their strongest listing windows here, and our guide to the best time to sell a vacation home in Mount Washington Valley walks through them. The best plan fits both calendars, which is one more reason to talk with your accountant before you choose a season
What to Gather Before Your Accountant Meeting
The meeting goes faster, and costs less, when you arrive with the paperwork already pulled together. Vacation homes are often owned for decades, so some of this may take a little digging.
Bring to your accountant:
✅ The closing statement from when you bought the home
✅ Receipts, invoices and permits for major improvements
✅ Your tax returns for any years the home was rented, including the rental schedules
✅ Records of personal-use nights and rental nights, if you rented
✅ If you inherited the home, the date the previous owner passed and any estate paperwork that lists the home’s value
✅ A realistic price range for the home today
That last item is where I come in. Before we talk about a list price, I can give you a range based on recent sales of similar Valley properties, so your accountant has a working number to plan with.
Frequently Asked Questions
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Not from the state. New Hampshire has no capital gains or income tax, so the gain is a federal matter and, if you live in a state with an income tax, possibly a home-state one. Ask your accountant how both apply to your sale before you list.
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Both parties. The tax is $15 per $1,000 of the sale price, divided between the buyer and the seller and paid at closing. Your purchase and sale agreement should state clearly who carries what.
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It depends on your state. States with an income tax generally tax their residents' income wherever it is earned, which can include a gain on New Hampshire property. An accountant who prepares returns in your state can tell you what applies.
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It can. If you rented the home and depreciation was claimed, that depreciation is generally taxed separately when you sell. Gather your past returns and rental records before you meet with your accountant.
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Before you list. Some answers, like which tax year the sale should close in or whether a 1031 exchange is possible, depend on decisions you make before the home goes on the market.
Thinking About Selling Your Vacation Home in the Valley?
Selling a place your family has enjoyed for years is a big decision, and the tax side is only one piece of it. When the accountant questions are answered early, the rest of the sale gets simpler: pricing, timing and what you will actually walk away with.
If you are starting to think about selling, I'd be happy to talk it through with you. We can meet in person, talk by phone, or set up a video chat, whatever feels easiest for you.
