Last Updated: April 2026
New Hampshire occupies a unique position in New England: it is the only state in the region with no income tax on wages and no general sales tax. This combination has made New Hampshire a popular destination for high earners from Massachusetts, and its southern tier (Nashua, Derry, Salem) functions effectively as a bedroom community for the Boston metro area. Despite this tax advantage, New Hampshire is not tax-free — its property taxes are among the highest in the nation, and residents fund local government almost entirely through property levies. This guide covers what New Hampshire residents need to know when evaluating a move.
The New Hampshire-Massachusetts border is one of the most tax-driven migration corridors in the US.
High earners in Massachusetts (5% flat income tax + 4% surtax above $1M) move to southern New Hampshire to escape Massachusetts income tax. For a Boston professional earning $250,000 living in a comparable NH community (Nashua, Portsmouth, Exeter): Massachusetts income tax approximately $12,500 vs New Hampshire income tax $0. Annual income tax savings: $12,500. Property tax comparison: a $600,000 home in Needham, MA (~1.2% effective rate) = $7,200 vs $600,000 home in Nashua, NH (~1.6%) = $9,600 — NH costs $2,400 more in property tax. Net income tax savings minus property tax increase: approximately $10,000/year. The math strongly favors New Hampshire for higher earners who commute to Boston or work remotely.
New Hampshire residents move to Massachusetts primarily for urban amenities, career opportunities in Boston, and — counterintuitively — for retirees who want healthcare access and proximity to cultural institutions. For a retiree on $80,000 income: New Hampshire costs $0 income tax + $9,450 property tax (500K home) = $9,450. Massachusetts: $4,000 income tax + $7,200 property tax = $11,200. New Hampshire is $1,750 cheaper annually for this profile.
New Hampshire residents rarely move to higher-tax Maine or Vermont for tax reasons. These moves are typically driven by lifestyle (rural property, outdoor recreation) or family. The tax direction is overwhelmingly from ME/VT to NH, not the reverse.
New Hampshire's relationship with Massachusetts has a notable tax complication:
During COVID-19, Massachusetts instituted a temporary rule taxing non-resident employees of Massachusetts employers on income earned from home if they would normally have worked in Massachusetts. New Hampshire challenged this rule (New Hampshire v. Massachusetts) — the Supreme Court declined to take the case in 2021, allowing Massachusetts's temporary rule to expire in 2021. However, under normal Massachusetts rules, New Hampshire residents who physically commute to Massachusetts work pay Massachusetts income tax on days worked in Massachusetts. New Hampshire residents who work fully remotely for Massachusetts employers from New Hampshire owe no Massachusetts income tax — New Hampshire has no reciprocal agreement with Massachusetts.
New Hampshire residents who previously lived in Massachusetts should ensure Massachusetts considers them non-residents: NH driver's license, voter registration in NH, NH as primary home, and no maintenance of a Massachusetts 'permanent place of abode' (spare bedroom at parents does not constitute this, but a leased or owned apartment does).
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New Hampshire Tax Help for US Expats →For most income levels above $80,000, yes — New Hampshire is cheaper on a total tax basis despite higher property taxes. The income tax savings dominate: a $150,000 earner saves $7,500/year in Massachusetts income tax by living in NH. The average property tax premium of $1,500–$2,500/year for a comparable home does not offset this. However, New Hampshire's property taxes erode the advantage for lower-income residents on modest homes. A retiree with $40,000 income on a $400,000 home: Massachusetts income tax $2,000 + property tax $4,800 = $6,800. New Hampshire income tax $0 + property tax $7,560 = $7,560. Massachusetts is marginally cheaper for this profile. The break-even point where NH's income tax savings exactly offset its property tax premium is roughly $80,000–$100,000 in earned income for a median-valued home.
No — New Hampshire does not tax retirement income. Social Security, pension income (private and government), IRA distributions, and 401(k) withdrawals are all exempt from New Hampshire tax. Investment income (interest and dividends) is subject to the I&D Tax through 2026, then exempt from 2027. This makes New Hampshire highly favorable for retirees with significant investment portfolios or qualified accounts. For a retiree with $100,000 in annual income (Social Security + pension + IRA): New Hampshire income tax is $0 (or modest I&D Tax if significant dividend income, phasing out). Compare to Vermont ($5,000–$7,000 tax), Maine ($4,000–$5,500 tax), or Massachusetts ($5,000 tax). For retirees, New Hampshire's combined no-income-tax + high-property-tax profile is competitive with most New England states but trails Florida and other Sun Belt no-tax states on property tax.
Based on demographic trends, New Hampshire out-migration is driven by: (1) Property taxes — retirees on fixed incomes find $8,000–$12,000/year property tax bills increasingly difficult to sustain on Social Security + modest pension; many move to Florida, Tennessee, or the Carolinas to reduce this burden; (2) Climate — New Hampshire winters are harsh; retirement migration to warm climates is significant; (3) Children/family — adult children who have left New Hampshire for better career opportunities elsewhere pull parents to follow; (4) Healthcare — retirees moving closer to major medical centers or adult children who can assist with care; (5) Cost of living — while taxes are favorable vs Massachusetts, New Hampshire's cost of living (particularly housing in the southern commuter belt) has risen significantly in the post-COVID period; young families move to less expensive regions; (6) Limited urban amenities — New Hampshire lacks major cities; Manchester and Nashua are modest, and residents seeking urban cultural life typically go to Boston or move to larger metro areas.