State Guide 9 min read Updated June 2026

Rental Property Taxes in Missouri (2026 Guide)

Missouri just became the most attractive state in the country for selling a rental: beginning in 2025 it exempts 100% of an individual's capital gains from state income tax. Add bonus-depreciation conformity, no transfer tax, and no annual LLC fee, and MO is unusually landlord-friendly. Here is what MO landlords need for 2026.

State Income Tax
Up to 4.70%
Capital Gains
0% (individuals)
Transfer Tax
None
LLC Annual Fee
$0

In This Guide

  1. 1. The 100% Capital-Gains Exemption (2025+)
  2. 2. State Income Tax on Rental Income
  3. 3. Property Tax in Missouri
  4. 4. Bonus Depreciation Conformity
  5. 5. No Transfer Tax
  6. 6. LLC Fees ($0 Annual)
  7. 7. Rent Control
  8. 8. Security Deposit Rules
  9. 9. How SheltrIQ Helps Missouri Landlords

1. The 100% Capital-Gains Exemption (2025+)

Beginning January 1, 2025, Missouri lets individuals deduct 100% of the capital gains reported on their federal return when computing Missouri income — making MO the first state to fully exempt capital gains for individuals (HB 594). The Department of Revenue confirms it covers gains from "stocks, real estate, and cryptocurrency," so a rental-property sale gain is exempt from Missouri income tax.

This applies to gains that land on a personal (1040) return — direct ownership or pass-through from an LLC/partnership/S-corp. Gains taxed at the C-corporation level do not yet qualify; the corporate version only triggers once Missouri's top individual rate falls to 4.5% or below.

2. State Income Tax on Rental Income

Missouri's income tax is graduated with a top rate of 4.70% for 2026, starting from federal AGI. Ordinary rental income is taxed on this schedule (the capital-gains exemption above applies to the gain on a sale, not to operating income).

One thing changed for 2026: Missouri's federal-income-tax deduction was repealed (RSMo 143.171). Returns for 2026 and later no longer reduce Missouri income by your federal tax — don't carry that old deduction forward.

3. Property Tax in Missouri

Residential property — including rentals — is assessed at 19% of market value (RSMo 137.115), with a statewide effective rate around 0.9%. Reassessment happens in odd-numbered years.

  • No homestead relief for rentals — the SB190 senior property-tax "freeze" applies only to an owner-occupied primary residence and explicitly excludes investment and rental property.

4. Bonus Depreciation Conformity

Missouri conforms to federal bonus depreciation (§168(k)) — there is no add-back. The full federal bonus deduction flows straight through to your Missouri return, so a cost-segregation study delivers its benefit at the state level too. That is an advantage over the many states that decouple and force you to spread the bonus out.

5. No Transfer Tax

Missouri charges no state or local real-estate transfer tax — one of about thirteen states with none. Selling a rental costs only nominal county recording fees, not a percentage of the price.

6. LLC Fees ($0 Annual)

Missouri has no annual report and no annual fee for an LLC, and the corporate franchise tax was repealed — only a one-time formation fee ($50 online) and a registered agent. That makes MO one of the cheapest states to hold rental property in an LLC.

7. Rent Control

Missouri prohibits local rent control (RSMo 441.043) — no city or county may regulate the rent charged for private residential property. The same statute also blocks local caps on security-deposit amounts.

8. Security Deposit Rules

  • Cap of 2 months' rent (RSMo 535.300).
  • Return within 30 days of the tenancy ending, with an itemized list of any deductions.
  • Penalty — wrongful withholding or a missed deadline exposes you to up to twice the deposit amount.

9. How SheltrIQ Helps Missouri Landlords

SheltrIQ makes the most of Missouri's landlord-friendly rules and keeps your returns aligned:

  • Disposition modeling — projects a sale knowing the Missouri capital-gains exemption zeroes the state layer for individuals, so you see the true after-tax result.
  • Bonus-depreciation capture — applies the full federal bonus that Missouri conforms to, with proper 27.5-year MACRS schedules.
  • AI Schedule E classification — sorts each expense to the right line so your MO income starts from an accurate federal return.
  • Deadline reminders — keeps estimated-payment dates on track even though MO asks nothing annually of the LLC.

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