Moving from Canada to New Hampshire: No Income Tax, the Highest Property Tax, and the Boston Commute

New Hampshire is the no-income-tax state next to Boston, and a large share of its Canadian arrivals work in Massachusetts and live across the line. Since the state repealed its interest and dividends tax at the start of 2025, New Hampshire taxes no personal income at all. It also has no sales tax. What it has is the highest property tax burden in the US, and a commuter rule that means a Nashua resident working in Boston still pays Massachusetts on Massachusetts wages.

Key takeaways

• New Hampshire has no tax on wages, business income, interest, or dividends. No sales tax.
• Property tax is the highest in the US, near 1.9% to 2% effective.
• No estate tax.
• A New Hampshire resident working in Massachusetts pays Massachusetts tax on Massachusetts-source wages; there is no reciprocity.
• The RRSP is untouched: no state income tax means no state layer.

The Canadian departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the day you leave. Canadian real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 to defer tax on illiquid assets. The rate is your province's: on a $300,000 unrealized gain, roughly $72,000 from Alberta and $80,000 from Ontario, Quebec, or BC. Provincial health coverage ends around your departure date; confirm the exact date with your plan and arrange US coverage to start the same month.

US federal side

Dual-status return in the arrival year, FBAR on Canadian accounts above $10,000 aggregate, Form 8938 above thresholds, and the RRSP treaty deferral federally. The TFSA loses its tax-free status the day you become a US person; close it before crossing. Equity compensation vesting after the move is split by working days between Canada and the US.

New Hampshire's side

No personal income tax of any kind since the interest and dividends tax was repealed effective 2025; no sales tax; property tax near 1.9% to 2% effective, the highest effective rate in the US; no estate tax. A New Hampshire resident who works in Massachusetts files a Massachusetts non-resident return and pays Massachusetts's 5% on wages earned there, with no offsetting New Hampshire credit because New Hampshire has no income tax to credit against. Remote work performed in New Hampshire for a Massachusetts employer is not Massachusetts-source income.

The RRSP

Untouched on departure, federally deferred under Article XVIII of the treaty, with no New Hampshire layer. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, with a US foreign tax credit.

Who makes this move

Canadian biotech and tech professionals working in Boston and Cambridge who live in Nashua, Manchester, or the Seacoast, Canadian defence engineers to BAE Systems in Nashua, Canadian healthcare staff to Dartmouth Health, Maritime and Quebec residents to the state's manufacturing and outdoor economy, and Canadian retirees drawing RRIF income with no state tax.

Worked example

A Toronto biotech scientist takes a Cambridge job and moves to Nashua on June 30 with $220,000 of unrealized gain in a non-registered account, $450,000 in an RRSP, and a Toronto condo sold in the departure year.

• Departure tax. $220,000 gain, $110,000 taxable, at about 53.5%: roughly $59,000.
• Condo. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; no state layer on withdrawals.
• Nashua. Massachusetts 5% on Cambridge wages; no New Hampshire income tax on investment income or RRIF withdrawals. HST 13% becomes sales tax zero. Property tax on a $600,000 home around $11,500.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

"The State of New Hampshire does not have an income tax on an individual's reported W-2 wages. [...] Effective for taxable periods beginning after December 31, 2024, the Interest and Dividends tax is repealed." — New Hampshire Department of Revenue Administration, Interest & Dividends Tax, https://www.revenue.nh.gov/taxes-glance/interest-dividends-tax

"You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least: 31 days during the current year, and 183 days during the 3-year period that includes the current year and the 2 years immediately before that." — Internal Revenue Service, Substantial Presence Test, https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

Practitioner note

New Hampshire works for two kinds of Canadians: retirees drawing RRIF and pension income with no state tax at all, and Boston-area workers who can arrange to work from home in New Hampshire on enough days to reduce Massachusetts-source wages. For a full-time Boston commuter, the income tax saving is limited to investment income; the property tax is not.

See also: Weighing Florida instead? See the Canada-to-Florida guide. Browse every corridor by city, province, and state.

Next step

Fairlight prepares the Canadian departure return, the first-year federal and state returns, and ongoing cross-border filings. See cross-border pricing or book a call.