If you’re a real estate investor, landlord, or small business owner, you may be asking:
“How do I transfer property to an LLC?”
Whether it’s to limit liability, gain tax advantages, or structure ownership more cleanly, transferring property into an LLC can be a smart move—but it must be done correctly to avoid legal or financial issues.
In this guide, we walk you through the step-by-step process of transferring real estate into an LLC, and what to consider before you do it.
Why Transfer Property to an LLC?
Transferring property to a Limited Liability Company (LLC) offers several benefits:
1. Liability Protection
Protects your personal assets if someone gets injured on the property or sues the business.
2. Tax Flexibility
LLCs offer pass-through taxation, and in some cases, electing S-Corp status can lower self-employment taxes.
3. Estate and Asset Planning
An LLC helps organize multi-property portfolios and makes it easier to manage ownership and inheritance.
4. Professionalism & Credibility
Owning real estate through an LLC looks more legitimate to partners, investors, and tenants.
How Do I Transfer Property to an LLC? (Step-by-Step)
Here’s how to legally and properly transfer real estate to an LLC:
Step 1: Form Your LLC
- Choose a unique name and file Articles of Organization with your state.
- Obtain an EIN (Employer Identification Number) from the IRS.
- Draft an Operating Agreement, especially for multi-member LLCs.
✅ Start here: Form Your LLC
Step 2: Prepare a Property Deed
- Work with a real estate attorney or title company to draft a new deed that transfers ownership from you (or your current entity) to the LLC.
- Most commonly used deed types:
- Quitclaim Deed (fast, easy, but offers no guarantees)
- Warranty Deed (preferred for title protection)
Step 3: Record the New Deed
- File the new deed with your county recorder’s office.
- Pay any recording fees or transfer taxes if required in your state.
Tip: Some states and counties may charge a real estate transfer tax even if you’re transferring it to your own LLC.
Step 4: Notify Your Lender (If There’s a Mortgage)
- If your property has a mortgage, transferring it could trigger the due-on-sale clause, making the loan payable immediately.
- Always check with your lender before transferring the title to avoid unintended foreclosure or penalties.
Step 5: Update Insurance and Lease Agreements
- Change your property insurance policy to list the LLC as the insured party.
- Update any tenant lease agreements with the LLC’s name as landlord or property manager.
Important Considerations Before Transferring Property to an LLC
- Loan implications: Transferring mortgaged property can violate lender terms.
- Title insurance: Title insurance may not carry over—you may need a new policy.
- Tax treatment: Generally, transferring to your own single-member LLC is not a taxable event, but multi-member or third-party situations may differ.
- Homestead property: If it’s your primary residence, moving it into an LLC could affect your homestead exemption or property tax benefits.
Always consult with a real estate attorney or CPA before transferring property.
Final Thoughts
So, how do you transfer property to an LLC?
It’s a straightforward process—form your LLC, draft a new deed, record it, and update your lender and insurance. But legal and tax implications can vary depending on the property’s use, financing, and state laws.
For maximum protection and compliance, work with professionals who can ensure everything is done right.
