Deferring capital gains does not automatically defer transfer, excise, deed, or mortgage taxes. Review each state's closing costs, withholding rules, and potential source-state tax obligations before you exchange.
Income-tax deferral is not a tax-free closing. Transfer and excise taxes are generally payable when due unless a separate exemption applies. Withholding is an advance payment, not necessarily the final tax. A 0% individual income-tax rate does not waive federal tax, property tax, recording fees, or business taxes.
State-level closing-tax issues were reviewed across all 50 entries; this is not an exhaustive audit of every local levy, entity type, or exemption. Sources have different publication dates. Income-rate references use the 2026 rate table, supplemented by linked enacted updates for Georgia 4.99%, Utah 4.45%, South Carolina 5.21% and West Virginia 4.58%, with capital-gains exceptions noted; local taxes, special surtaxes, and deductions may change actual liability. Confirm current rules for both properties with your closing professional and tax advisor.
Qualifying real-property exchanges generally follow federal §1031. Nonresident withholding is generally 3% for individuals and 4% for other sellers, subject to exceptions and permitted gain-based calculations. Document nonrecognition with the closing agent using NR-AF3; taxable boot needs separate review.
Deed recordation tax and mortgage recording tax can apply independently of §1031. Deferring gain does not itself exempt the deed or financing instrument.
No individual state income tax. Federal exchange requirements still apply, and corporate, property-tax, and recording obligations must be evaluated separately.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031, including exchanges into another state. State basis differences and deductions can change tax on recognized gain.
Arizona constitutionally prohibits new real-property transfer taxes, subject to its stated scope. Recording fees and property taxes are separate; do not treat §1031 as a waiver of ordinary closing costs.
Qualifying real-property exchanges generally follow federal §1031. The headline rate is an ordinary-income reference, not necessarily the effective tax rate on capital gains.
Real Property Transfer Tax applies to covered conveyances. §1031 income-tax deferral is not, by itself, a transfer-tax exemption.
California-source deferred gain can remain taxable to California after an out-of-state exchange. File FTB 3840 for the exchange year and annually thereafter as required until the reporting obligation ends. Use current Form 593 to document full or partial withholding relief; boot or a failed deferred exchange can trigger withholding. Income-tax deferral does not prevent property-tax reassessment.
County documentary transfer taxes and city transfer taxes, including applicable high-value transfer charges, need separate review. A 1031 exchange does not automatically avoid those taxes or change-in-ownership reassessment.
Qualifying real-property exchanges generally follow federal §1031. Nonresident real-property transfers of $100,000 or more may require withholding. Review DR 1083, including the affirmation that no Colorado tax is reasonably estimated to be due; do not assume exchange status automatically completes the paperwork.
Documentary recording fees and applicable local real-estate transfer taxes are separate from §1031 income-tax deferral. Local rules and exemptions must be checked for both properties.
Qualifying real-property exchanges generally follow federal §1031. Nonresidents may still owe Connecticut income tax on recognized Connecticut-source gain. Conveyance-tax filing is separate from income-tax treatment.
State and municipal real estate conveyance taxes may apply. File the required conveyance return and check property-specific rates and exemptions; federal nonrecognition is not a blanket conveyance-tax exemption.
Qualifying real-property exchanges generally follow federal §1031. Confirm any seller income-tax declarations and estimated-payment obligations separately from realty transfer tax.
State and local realty transfer taxes must be evaluated separately from deferred capital gains. A qualifying §1031 exchange does not itself eliminate the transfer charge.
No individual state income tax does not mean a tax-free closing. Federal capital-gain deferral remains relevant; corporate income tax, property taxes, documentary stamps, and financing taxes require separate review.
Documentary stamp tax on deeds remains a separate obligation; mortgage documentary stamps and nonrecurring intangible tax can also arise on financing. Reverse exchanges and transfers through an accommodation titleholder require deed-by-deed exemption analysis, not an assumed blanket §1031 exemption.
Qualifying real-property exchanges generally follow federal §1031. Nonresident withholding is generally 3% of consideration, with exceptions and a permitted gain-based alternative. Georgia DOR lists a like-kind exchange exemption where the income is not subject to federal or state income tax; it does not impose the previously stated blanket in-state replacement requirement. Review IT-AFF3 and any taxable boot with the closing agent.
Real estate transfer tax and applicable intangible recording tax on secured financing are separate from income-tax deferral. Budget these independently of withholding relief.
Qualifying real-property exchanges generally follow federal §1031. HARPTA withholding is generally 7.25% of the amount realized, not 5% and not the final tax liability. Review N-289 for qualifying nonrecognition relief, or N-288B when a withholding certificate is needed. Ordinary-income rates can be higher than the long-term capital gains rate shown.
Conveyance tax is separate from HARPTA withholding and income tax. A nonrecognition or withholding certificate does not automatically exempt the conveyance; use the conveyance-tax return and applicable exemption rules.
Qualifying real-property exchanges generally follow federal §1031. State basis adjustments and any Idaho capital-gains deduction require separate eligibility review when gain is recognized.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. Entity-level taxes and state, county, and municipal transfer charges are separate questions.
State, county, and applicable municipal real-estate transfer taxes can remain payable. Each jurisdiction’s exemption rules and declaration requirements must be checked independently of §1031.
Qualifying real-property exchanges generally follow federal §1031. The rate shown is state-only; applicable county income taxes are not included.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. Specialized capital-gains deductions, including those for certain farm transactions, are not automatic exchange exemptions.
Iowa real estate transfer tax is a separate charge when a covered deed is recorded. Federal income-tax deferral does not itself establish an exemption.
Qualifying real-property exchanges generally follow federal §1031. Federal deferral does not waive ongoing property taxes or county recording requirements.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. The individual income-tax rate does not cover entity-level or local taxes.
Kentucky imposes a real estate transfer tax on covered deeds. §1031 qualification is not a blanket exemption under KRS 142.050; specific exemptions must be documented.
Qualifying real-property exchanges generally follow federal §1031. The absence of a general statewide transfer tax does not eliminate parish recording charges or property-tax obligations.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. Nonresident withholding is generally 2.5% of consideration on sales of $100,000 or more, not the former $50,000 threshold. Request any reduction or exemption using REW-5 sufficiently before closing; relief and processing requirements must be confirmed with Maine Revenue Services.
Real estate transfer tax is distinct from nonresident income-tax withholding. Withholding relief for an exchange does not automatically exempt transfer tax.
Qualifying real-property exchanges generally follow federal §1031. The 2026 MW506NRS rates are 8.75% for nonresident individuals/estates/trusts and 8.25% for entities, applied to the form-defined payment unless relief applies—not automatically just the gain. Apply for a MW506AE exemption or reduction at least 21 days before closing. Local income taxes and the additional 2% tax on certain recognized net capital gains for high-income taxpayers can add to the headline rate; exemptions are asset-specific.
State/local transfer taxes and recordation taxes may remain due despite income-tax deferral. Also review the additional capital-gains tax on recognized gain; the primary-residence exception is not a blanket rental/investment-property exception.
Massachusetts-source gain can remain taxable after an out-of-state exchange. The 4% surtax uses an annually adjusted income threshold. For closings on or after November 1, 2025, sales of $1 million or more require Form NRW and each seller’s Transferor’s Certification even when no withholding is due. Nonresident withholding and special like-kind exchange reporting must be addressed; recognized boot can require withholding.
Massachusetts DOR expressly states that each parcel conveyed in a real-estate exchange is subject to deeds excise. Applicable local transfer charges also need review; income-tax deferral does not waive them.
Qualifying real-property exchanges generally follow federal §1031. Income-tax deferral is separate from transfer taxes and property-tax transfer-of-ownership rules; review taxable-value uncapping and local income taxes where applicable.
State and county real estate transfer taxes have separate exemption rules. Review property-transfer reporting and taxable-value uncapping independently of income-tax nonrecognition.
Qualifying real-property exchanges generally follow federal §1031. In addition to regular income tax, Minnesota imposes a 1% net investment income tax on net investment income over $1 million for individuals, estates, and trusts. Recognized gain or boot may enter that calculation; deferred gain is not automatically current taxable income.
Deed Tax, Mortgage Registry Tax, and applicable county additions are not deferred by §1031. The separate state NIIT is an income-tax issue on recognized investment income, not a transfer tax.
Qualifying real-property exchanges generally follow federal §1031. The 5% nonresident withholding provision for sales over $100,000 expressly addresses sales not considered an exchange or trade. Do not assume replacement property must be in Mississippi to qualify; confirm the transaction’s treatment and documentation, particularly for partial or failed exchanges. Future income-tax reductions depend on the applicable law and triggers.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
From 2025, individuals may subtract income reported as capital gains for federal purposes. This is not an exemption for all real-estate proceeds: ordinary-income depreciation recapture and corporate eligibility need separate analysis. Federal 1031 benefits remain relevant, and tax owed to another source state is not erased by Missouri’s deduction.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing. The individual capital-gains subtraction is not a waiver of ordinary-income recapture or federal tax.
Qualifying real-property exchanges generally follow federal §1031. Montana has separate 3.0% and 4.1% long-term capital-gains brackets; the 2026 ordinary-income top rate is 5.65%. Retain source-state basis records for an out-of-state exchange and confirm later sourcing obligations; do not assume a California-style annual reporting form applies.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. Documentary stamp tax is a separate closing obligation, even when no income-tax gain is currently recognized.
Documentary stamp tax remains separate from deferred gain. Nebraska increased the recording-date rate to $3.32 per $1,000 of value (or fraction) for deeds recorded on or after July 18, 2026; check statutory exemptions.
No individual state income tax. Real property transfer tax, recording charges, property taxes, and applicable business taxes are separate from federal §1031 deferral.
Nevada Real Property Transfer Tax is payable on covered recorded transfers, despite no individual income tax. County additions and statutory exemptions vary; §1031 alone is not an exemption.
No general individual income tax; the interest and dividends tax was repealed from 2025. This does not eliminate real estate transfer tax or applicable Business Profits Tax/Business Enterprise Tax obligations. A business or rental-property owner needs a separate entity and activity review.
New Hampshire DRA explicitly lists §1031 exchanges as taxable for Real Estate Transfer Tax. Exchanges generally use fair market value; the tax is imposed on both buyer and seller. Income-tax deferral does not defer this transfer tax.
Qualifying real-property exchanges generally follow federal §1031. GIT/REP-3 includes a seller assurance for a wholly deferred §1031 exchange; partial exchanges can require estimated payments. Bulk-sale notification using C-9000 is a separate requirement for covered asset transfers, not a universal substitute for GIT/REP. Where required, allow at least 10 business days before closing.
The Realty Transfer Fee remains separate from income-tax nonrecognition. Covered transfers over $1 million may also incur the seller-paid Graduated Percent Fee; review property class, consideration, effective dates, and exemptions rather than assuming a §1031 waiver.
Qualifying real-property exchanges generally follow federal §1031. State capital-gain deduction limitations and entity-level obligations require separate review; a general income-tax rate is not an effective transaction rate.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. The 2026 IT-2663 uses 10.90% for estimated tax on recognized gain, not 7.7%. A fully nonrecognizing exchange may qualify for the applicable certification; partially deferred transactions need gain calculations and an exchange summary under the form instructions. Transfer-tax filings remain separate, and applicable local income taxes are not included in the headline rate.
State transfer tax, applicable local transfer taxes, residential mansion/supplemental taxes, and mortgage recording taxes require separate analysis. A 1031 exchange does not automatically exempt these charges or the related transfer filings.
Qualifying real-property exchanges generally follow federal §1031. For covered purchases from nonresident sellers, the buyer files NC-1099NRS with NCDOR within 15 days of closing. This is an information report—not a general 4% real-estate withholding requirement and not a filing with the Secretary of State. Recognized gain can still require a nonresident income-tax return or estimated payments.
The real-estate conveyance excise tax and any applicable local land-transfer charges are separate from income-tax deferral. NC-1099NRS is seller reporting, not a transfer-tax exemption or withholding payment.
Qualifying real-property exchanges generally follow federal §1031. Any state capital-gain exclusion and state basis differences must be evaluated separately when gain is recognized.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. The state income-tax reference excludes applicable municipal or other local income taxes. Conveyance fees are separate.
Mandatory and applicable county real-property conveyance fees can be due on a covered transfer. A §1031 exchange does not itself exempt the conveyance fee.
Qualifying real-property exchanges generally follow federal §1031. A separate Oklahoma capital-gain deduction may apply to eligible property and holding periods; it is not a blanket exemption for every real-estate sale.
Documentary stamp tax on covered real-estate deeds is separate from income tax; review any mortgage recording tax on replacement financing as well. §1031 is not a blanket closing-tax exemption.
Oregon-source deferred gain can remain taxable after an out-of-state exchange. File Form OR-24 for covered exchanges and annually thereafter as required. Evaluate OR-18-WC separately for withholding or an exemption; the standard calculation generally compares 4% of consideration, 8% of includable gain, and net proceeds. Applicable local income taxes are not included here.
Oregon has no general statewide transfer tax, but Washington County has a real-property transfer tax. Its exemptions and filing requirements must be checked separately; no statewide tax does not mean every Oregon closing is exempt.
Pennsylvania recognizes qualifying §1031 deferral for personal income-tax years beginning after December 31, 2022. This income-tax conformity does not create a blanket realty transfer tax exemption.
Pennsylvania state and applicable local realty transfer taxes are separate from §1031 income-tax deferral. Intermediate conveyances in an exchange need their own exemption analysis; do not assume that a qualified intermediary makes every deed exempt.
Qualifying real-property exchanges generally follow federal §1031. Nonresident withholding generally uses 6% for individuals and certain other sellers, or 9% for corporations, on the statutory total payment—not automatically gross sale price. Review the current nonresident real-estate forms and any nonrecognition certification before closing.
Real Estate Conveyance Tax applies independently of income-tax deferral. Rates increased October 1, 2025, and covered higher-value residential transfers have an additional tier; use the current statutory threshold and exemptions.
Qualifying real-property exchanges generally follow federal §1031. A 44% net long-term capital-gain deduction may reduce the taxable amount when applicable. Nonresident withholding uses current I-290/I-295 instructions; deferred exchanges have specific arrangements under Revenue Ruling 09-13, rather than an unconditional exemption merely from signing an affidavit.
The Deed Recording Fee is a separate transfer charge, not deferred income tax. §1031 does not itself waive it; review the fee exemptions separately from nonresident withholding arrangements.
No individual state income tax, but real estate transfer fees and ongoing property taxes still require review. Federal §1031 requirements remain relevant.
South Dakota imposes a real estate transfer fee even though it has no individual income tax. Federal §1031 qualification does not itself establish an exemption from that fee.
No individual state income tax. Realty transfer and mortgage taxes can apply, and LLCs or other businesses may have franchise and excise tax obligations; individual income-tax status is not an entity-tax exemption.
Realty transfer and mortgage recordation taxes are separate obligations. Qualifying for federal income-tax deferral does not automatically eliminate these charges or an entity’s franchise-tax liability.
No individual state income tax. Property taxes, recording fees, and franchise-tax obligations for covered entities remain separate; a federal §1031 exchange is not a blanket exemption from those obligations.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.
Qualifying real-property exchanges generally follow federal §1031. Recording and property-tax obligations continue despite income-tax deferral.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing. Utah’s 2026 individual income-tax rate is 4.45% under enacted S.B. 60, retroactive to tax years beginning January 1, 2026.
Qualifying real-property exchanges generally follow federal §1031. Nonresident real-estate withholding is generally 2.5% of sale price unless an applicable exemption or withholding certificate is available. Separately review Land Gains Tax for land purchased and subdivided by the seller fewer than six years before sale or exchange; that tax has its own exemptions, filings, and withholding rules.
Property Transfer Tax and applicable surcharge rules are separate from §1031. Vermont Land Gains Tax is another distinct regime for covered short-held subdivided land; do not assume federal deferral also defers it. Confirm land-gains exemptions, certificates, and withholding for the specific transaction.
Qualifying real-property exchanges generally follow federal §1031. State and local recordation taxes and grantor charges are distinct from capital-gain income tax.
State/local recordation taxes, grantor taxes, and applicable regional charges can apply despite §1031 deferral. Deeds and financing instruments have their own tax bases and exemption rules.
Washington excludes real-estate sales and exchanges from its capital gains tax, but a 1031 exchange does NOT defer or automatically exempt Washington Real Estate Excise Tax (REET). State and applicable local REET remain due on taxable transfers. WAC 458-61A-213 provides limited relief for a subsequent facilitator transfer only when its specific conditions and documentation are satisfied; it does not exempt the underlying sale. A REET affidavit is required for each transfer, including transfers to and from the facilitator.
REET is a transaction tax, not a tax on deferred capital gain. Budget applicable state and local REET at closing even when 100% of the federal gain is deferred. Facilitator relief can prevent a second tax only if the rule’s conditions—including prior tax payment, funding, and a supplemental statement—are met.
Qualifying real-property exchanges generally follow federal §1031. Nonresident withholding may be based on the statutory payment or an approved gain calculation. Review WV/NRAE and request any required exemption certificate at least 21 days before closing; a planned exchange alone does not complete the exemption process.
Excise tax on the privilege of transferring real estate, applicable county additions, and recording fees are separate from §1031 income-tax deferral. Check current county collection requirements.
Qualifying real-property exchanges generally follow federal §1031. Individuals generally may deduct 30% of eligible net long-term capital gains, so the headline ordinary-income rate is not necessarily the effective capital-gain rate. Wisconsin basis differences and special rules require separate review.
The Wisconsin real estate transfer fee and transfer return are separate from deferred income tax. Each deed needs its own statutory exemption analysis; §1031 is not a blanket transfer-fee exemption.
No individual state income tax. Federal §1031 rules still matter, while county recording requirements and property taxes remain separate obligations.
No general statewide real-estate transfer tax is identified in the cited national survey. That is not an exemption from recording fees, property taxes, special assessments, or applicable business taxes; confirm current county and municipal charges before closing.