North Dakota taxes capital gains at 1.95%. Combined with federal taxes, your effective rate on a home sale could reach 20.8%.
ND State Rate
1.95%
Top marginal rate
Federal Rate
15%
Most common long-term bracket
Combined Effective
20.8%
On $150K taxable gain (example)
After the $250K/$500K exclusion, here's what a typical seller might owe.
If North Dakota is where your primary residence is located and you've lived there at least 2 of the last 5 years, you can exclude up to $250K (single) or $500K (married filing jointly) of your capital gain from both federal and state taxes.
Investment and rental properties in North Dakota don't qualify for the exclusion. You'll owe 1.95% state tax plus federal tax on the full gain, plus 25% depreciation recapture on any depreciation claimed.
In North Dakota, homes sold in October sell for 13% more than those sold in January (-17%). Timing your sale right can offset a significant portion of your tax bill.
Capital gains tax rates on home sales in North Dakota and nearby states.
| State | Rate | Tax on $150K Gain | Notes |
|---|---|---|---|
| 0% | $0 | No state income tax | |
North DakotaYou | 1.95% | $2,925 | Top marginal rate |
| 5.9% | $8,850 | Top marginal rate; 2% credit available | |
| 9.85% | $14,775 | Top marginal rate |
Selling in South Dakota instead of North Dakota would save $2,925 in state tax on a $150K gain.
North Dakota has one of the lowest income tax rates at 1.95%, making capital gains nearly tax-free at the state level.
Bismarck and Fargo are the primary markets. The oil boom cycle in western ND creates unique property value dynamics.
At 1.95%, the state tax on a $100,000 gain is just $1,950 — barely a rounding error compared to the federal tax bill.
The low rate makes North Dakota one of the most tax-friendly states for real estate transactions.
Offering buyer concessions?
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