1031 Exchange & DST Investing in Dallas–Fort Worth, TX
Dallas-Fort Worth is one of the nation's largest industrial and corporate-relocation markets, with deep multifamily and net-lease sectors. Because Texas has no state income tax, a 1031 exchange faces no state-level capital-gains tax, and DSTs are available to accredited investors nationwide.
State tax treatment of a 1031 exchange
Capital-gains treatment is set at the state level, and Texas imposes no personal income tax. As a result there is no state capital-gains tax on a real estate sale and no state nonresident withholding, so a 1031 exchange in Dallas-Fort Worth defers only federal tax on the gain. See our Texas state page for details.
Market snapshot
The Dallas-Fort Worth Metroplex is the largest metro in Texas and one of the deepest commercial real estate markets in the country. It ranks among the nation's top industrial markets, anchored by DFW International Airport, the AllianceTexas logistics hub, and interstate connectivity that supports large-scale distribution across South Dallas and North Fort Worth. A steady stream of corporate relocations and headquarters, including Toyota North America, Charles Schwab, and Caterpillar in the Plano-Frisco corridor, has driven office, net-lease, and multifamily demand.
Frisco, Plano, McKinney, Arlington, and the northern suburbs have absorbed sustained population and job growth, keeping DFW among the leaders nationally in apartment construction and absorption. After record deliveries, rent growth has normalized and cap rates have widened from cycle lows across industrial, multifamily, and retail. For 1031 investors, DFW's diversified economy, central logistics location, business-friendly climate, and no state income tax are why it consistently attracts replacement capital across property types.
Why 1031 & DST investors look here
- One of the largest U.S. industrial and distribution markets, anchored by DFW airport and AllianceTexas
- Continuous corporate relocations and headquarters expansions across finance, logistics, and technology
- No state income tax plus sustained population and job growth supporting demand
Replacement-property options
An investor selling in Dallas-Fort Worth can defer gain by exchanging into DST interests, and the replacement property need not be in Texas; like-kind treatment applies to real estate anywhere in the United States. Delaware Statutory Trusts allow accredited investors to reinvest proceeds into professionally managed, institutionally sized assets, and a 721 UPREIT contribution or Qualified Opportunity Zone investment may suit some objectives. Suitability depends on individual circumstances and should be reviewed with qualified tax and financial professionals.
Frequently asked questions
Is Dallas-Fort Worth a good market for a 1031 replacement?
DFW offers a large, diversified economy, top-tier industrial fundamentals, and strong population growth, though heavy supply has normalized rent growth. Whether it fits an exchange depends on your objectives and risk tolerance.
Does Texas tax a 1031 exchange?
Texas has no state income tax, so there is no state-level capital-gains tax on a property sale and no state withholding. A 1031 exchange in Dallas-Fort Worth defers only federal tax on the gain.
Can I exchange Dallas-Fort Worth property for out-of-state DSTs?
Yes. Like-kind real estate can be located anywhere in the United States, so DFW sale proceeds can be exchanged into DSTs holding property in other states.
Gerald F. “Jerry” Baker, III — Founder & Managing Principal, Baker 1031 Investments · FINRA Series 22 / 63 · SIE. Read full bio →
State tax treatment is general and changes frequently; this page is educational and is not tax, legal, or investment advice. Confirm current state and local rules with your own CPA and attorney. Securities offered through Aurora Securities, member FINRA/SIPC. Real estate investments involve risk, including possible loss of principal.