1031 Exchanges in North Dakota: Rules, Taxes, Insurance, and the Long Arc

A Shop 1031 research page. Reviewed 2026-06-03. Every claim sourced; sources collected at the foot of the page.

North Dakota is a low-rate conforming state with material energy-sector cyclicality, not a generic Plains jurisdiction. The distinction matters because the Bakken oil-and-gas corridor produces concentrated boom-and-bust dynamics in property values in the western part of the state that affect 1031 acquisitions and dispositions through commodity-price cycles. North Dakota conforms to federal §1031 through North Dakota Century Code Title 57 and taxes recognized boot at graduated rates topping at 2.5 percent.

§1. 1031 mechanics in North Dakota

The federal floor applies under 26 U.S.C. §1031 and 26 C.F.R. §1.1031(k)-1. ^{1 2}

North Dakota conforms to federal §1031 under N.D.C.C. Title 57, Chapter 57-38. Recognized boot is taxed at the North Dakota graduated rate topping at 2.5 percent on individual income, among the lowest top marginal rates in the country. ³

North Dakota imposes no state-level real estate transfer tax. Recording fees at the county recorder are nominal.

North Dakota imposes no state-level QI registration regime.

North Dakota is functionally an attorney-state for real estate closings.

§2. Property tax in North Dakota

North Dakota has an effective property tax rate of approximately 0.97 percent of owner-occupied housing value, near the 1.02 percent national median. The structural mechanics are governed by N.D.C.C. Title 57. Property is assessed at fifty percent of the true and full value, with the taxable value applied to local mill levies. ⁴

Harlow’s note on unit economics. On a $5,000,000 North Dakota commercial acquisition, year-one property tax runs roughly $40,000 to $80,000 depending on the specific city and county mill stack.

§3. Property insurance in North Dakota

North Dakota property insurance is dominated by severe-thunderstorm, tornado, hail, and winter exposure (snow load, ice). The North Dakota Insurance Department regulates carrier conduct. ⁵

Harlow’s note on unit economics. For a $5,000,000 North Dakota commercial property, expect property-insurance expense in the range of 0.4 to 0.9 percent of insured value.

§4. Demographic trends

North Dakota’s population stood at approximately 790,000 as of 2025 Census estimates, with modest growth. The Bakken oil boom of the 2010s pulled growth significantly, with subsequent moderation since 2016. ^{6 7}

Median household income in North Dakota was approximately $75,000 in 2024, slightly above the national median. ^{8 9}

The major North Dakota markets are Fargo (approximately 250,000 population including the Minnesota side), Bismarck (approximately 135,000), Grand Forks (approximately 100,000), and the Minot and Williston corridors (Williston serving as the Bakken hub).

§5. Unique legal and financial considerations

The first is the Bakken oil-and-gas corridor exposure. Property in Williston, Watford City, Stanley, and the broader Williston Basin is exposed to oil-price cyclicality through both direct (oilfield-services real estate) and indirect (multifamily and retail demand) channels.

The second is the agricultural land ownership and corporate farming framework under N.D.C.C. Chapter 10-06.1, which restricts certain corporate and non-resident ownership of North Dakota farmland.

The third is the surface and mineral rights severance, common in Bakken-area properties.

The fourth is the proximity to Canadian markets and the resulting cross-border tenant and capital dynamics in Pembina and Bottineau Counties.

§6. Closing summary and the work ahead

The North Dakota 1031 exchanger is operating in a market with a clear set of distinguishing features. The federal floor applies; North Dakota fully conforms at graduated rates topping at 2.5 percent (among the lowest in the country); there is no state real estate transfer tax; property tax effective rate is near the national median; insurance exposure is dominated by severe weather and winter; the Bakken oil corridor produces cyclical exposure on western property; corporate farming and non-resident ownership restrictions apply under N.D.C.C. Ch. 10-06.1; mineral severance is common; cross-border Canadian dynamics affect the Pembina corridor. The jurisdiction-specific factors above are starting-point context. A state-experienced CRE professional will translate them into deal-specific judgment.

This page is the working map. The actual exchange is run by people. A North Dakota-licensed real estate attorney, a North Dakota-licensed CPA familiar with §1031, a Qualified Intermediary, and a CRE professional who knows this market and these properties. Shop 1031 is the analytics layer that triages which deals deserve your time. The professionals do the work.

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Shop 1031 is an independent analytics platform. We are not a brokerage, a law firm, a tax advisor, a lender, or a Qualified Intermediary. Every 1031 exchange should be reviewed by a state-licensed real estate attorney, a CPA familiar with IRC §1031, and a QI. Brokerage and advisory services, when used, are provided by independently licensed third parties under separate engagement. This page is research, not advice. The North Dakota-specific surfaces discussed (Bakken oil corridor exposure on western property, corporate farming and non-resident farmland ownership restrictions under N.D.C.C. Ch. 10-06.1, mineral severance review on Bakken-area properties, cross-border Canadian commercial dynamics) each carry material risk if mishandled and should be addressed with a North Dakota-licensed attorney, a North Dakota-licensed CPA, and a Qualified Intermediary before identification, not after.

Federal authority: 26 U.S.C. §1031; 26 C.F.R. §1.1031(k)-1.

North Dakota authority: N.D.C.C. Title 57 (Taxation), Ch. 57-38 (income tax); Ch. 10-06.1 (Corporate Farming).

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