Capital gains tax on real estate by state (2026)
Most states tax capital gains as ordinary income, so the state rate on a large real estate gain is usually the state's top income-tax rate. Eight states have no individual income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. Washington has no income tax, and its separate capital gains tax exempts real estate.
The federal layer applies everywhere: up to 20% long-term capital gains, up to 25% on depreciation recapture, and the 3.8% Net Investment Income Tax for higher earners. For a high-income seller, federal plus NIIT alone is 23.8% before any state tax.
| State | Top 2026 state rate | Top combined w/ federal 23.8% | Notes |
|---|---|---|---|
| California | 13.30% | 37.10% | Includes 1% mental health surcharge over $1M |
| Hawaii | 11.00% | 34.80% | Hawaii applies a lower alternative rate to many long-term gains; confirm with your CPA |
| New York | 10.90% | 34.70% | Plus up to 3.876% for NYC residents |
| District of Columbia | 10.75% | 34.55% | |
| New Jersey | 10.75% | 34.55% | |
| Oregon | 9.90% | 33.70% | |
| Minnesota | 9.85% | 33.65% | |
| Massachusetts | 9.00% | 32.80% | 5% base rate plus 4% surtax on income over $1,083,150 |
| Vermont | 8.75% | 32.55% | |
| Wisconsin | 7.65% | 31.45% | |
| Maine | 7.15% | 30.95% | |
| Connecticut | 6.99% | 30.79% | |
| Delaware | 6.60% | 30.40% | |
| Maryland | 6.50% | 30.30% | |
| South Carolina | 6.00% | 29.80% | |
| Rhode Island | 5.99% | 29.79% | |
| New Mexico | 5.90% | 29.70% | |
| Virginia | 5.75% | 29.55% | |
| Montana | 5.65% | 29.45% | |
| Kansas | 5.58% | 29.38% | |
| Idaho | 5.30% | 29.10% | |
| Georgia | 5.19% | 28.99% | |
| Alabama | 5.00% | 28.80% | |
| Illinois | 4.95% | 28.75% | |
| West Virginia | 4.82% | 28.62% | |
| Missouri | 4.70% | 28.50% | |
| Nebraska | 4.55% | 28.35% | |
| Oklahoma | 4.50% | 28.30% | |
| Utah | 4.50% | 28.30% | |
| Colorado | 4.40% | 28.20% | |
| Michigan | 4.25% | 28.05% | |
| Mississippi | 4.00% | 27.80% | |
| North Carolina | 3.99% | 27.79% | |
| Arkansas | 3.90% | 27.70% | |
| Iowa | 3.80% | 27.60% | |
| Kentucky | 3.50% | 27.30% | |
| Pennsylvania | 3.07% | 26.87% | |
| Louisiana | 3.00% | 26.80% | |
| Indiana | 2.95% | 26.75% | |
| Ohio | 2.75% | 26.55% | |
| Arizona | 2.50% | 26.30% | |
| North Dakota | 2.50% | 26.30% | |
| Alaska | 0% | 23.80% | |
| Florida | 0% | 23.80% | |
| Nevada | 0% | 23.80% | No individual income tax |
| New Hampshire | 0% | 23.80% | No tax on wages or capital gains |
| South Dakota | 0% | 23.80% | |
| Tennessee | 0% | 23.80% | No individual income tax |
| Texas | 0% | 23.80% | |
| Washington | 0% on real estate | 23.80% | No income tax; separate capital gains tax on certain assets, but real estate sales are exempt |
| Wyoming | 0% | 23.80% |
Source: Tax Foundation, 2026 State Income Tax Rates and Brackets. Top marginal rates on ordinary income; some states offer capital-gains exclusions, credits, or lower rates. Combined column = 20% federal LTCG + 3.8% NIIT + state top rate, excluding depreciation recapture and local taxes. Educational only.
Estimate your capital gains tax on a property sale
Why the state you sell in matters more than where you live
Real estate gain is usually taxed by the state where the property is located. A Nevada resident selling a California rental generally still owes California tax on that gain. That's why a 1031 exchange, which defers both federal and state tax, is so valuable for owners in high-tax states. See our California and New York guides.
Prefer a printable reference? Download the free Capital Gains Tax by State guide (PDF).
Capital Gains Tax by State FAQ
Tell us where you are in the sale. A licensed Nevada broker responds within one business day, usually the same day. We coordinate with your QI, CPA, and attorney; we don't replace them.