Missouri Just Eliminated State Taxes on Capital Gains — Here’s What That Means for Property Owners and Investors

Starting January 1, 2025, Missouri will officially become one of the most tax-friendly states for real estate investors and property sellers.

Thanks to House Bill 594, all capital gains income reported on your federal tax return will be 100% deductible from your Missouri state taxable income. In plain English: you won’t pay Missouri state income tax on capital gains anymore.

 What Are Capital Gains?

Capital gains are the profits you make when you sell an asset for more than you paid—like investment property, land, or even a long-term rental. These gains are typically taxed by both the federal and state governments.

Until now, Missouri treated capital gains just like regular income, taxing them at rates up to 4.7%–5.3% depending on how much you earned. That meant a $100,000 gain could have cost you roughly $5,000 in Missouri state tax alone.

 What’s Changing in 2025?

With HB 594 going into effect:

• Capital gains will be excluded from your Missouri adjusted gross income.

• Missouri residents (and non-residents selling Missouri property) will save thousands on qualifying property sales.

• This change applies to real estate sales, investment portfolios, farmland, and more—as long as it qualifies as a capital gain federally.

 Why This Matters

• Investors now have a compelling reason to invest in or sell property in Missouri.

• Landlords looking to sell appreciated rental homes can keep more of their profit.

• Homeowners exceeding the federal capital gains exemption ($250K/$500K) can benefit too.

• Flippers and developers may see better ROI on projects completed in 2025 and beyond.

 Should You Wait to Sell?
If you're planning to sell an appreciated asset—especially real estate—Now could be a smart time to sell and take advantage of this new benefit.

 Want to explore how this affects your specific property? Let’s talk strategy.
Whether you're an investor, homeowner, or thinking about getting into real estate, this is the kind of tax shift that creates real opportunity.