How to Transfer Property to an LLC, Step by Step

Moving a property you already own into an LLC sounds like ten minutes of paperwork: sign a deed, file it with the county, done. The deed part really is simple. What catches people is everything around it: the mortgage, the title insurance, a transfer tax you didn’t expect, a property tax exemption that quietly disappears, and an insurance policy that no longer covers the owner on the deed.

This guide walks through the transfer step by step, in the order that avoids those problems. It’s written mainly for rentals and other investment property. If you’re thinking about moving your house, or the garage behind it, into your business, there’s a section near the end for you, and the short answer there is usually “don’t.”

Whether a rental belongs in an LLC at all is its own question, covered in should your rental be in an LLC? This article starts after you’ve decided yes.

Short version: To transfer property to an LLC, you form the LLC first, then sign a new deed from yourself to the LLC and record it with the county. Before you sign, check five things. The mortgage: Fannie Mae and Freddie Mac allow transfers to an LLC you control for loans they bought on or after June 1, 2016, but other loans may let the lender demand full repayment. Title insurance: make sure your owner’s policy keeps covering you after the transfer. Transfer tax and property tax: many states exempt transfers where ownership doesn’t really change, but some charge tax or reassess. Exemptions: homestead and programs like New York’s STAR can be lost when an LLC owns the home. Insurance: the policy has to name the LLC. Income taxes usually don’t change for a single-member LLC. For a garage on your home lot, it’s usually better to keep the property in your name and have your business rent the space from you.

Step 1: Be Clear on What the Transfer Does and Doesn’t Do

An LLC can keep a lawsuit about the property, like a tenant injured on the stairs, from reaching your personal savings and your other properties, as long as you run the LLC properly. Piercing the veil covers what “properly” means.

It doesn’t protect you from your own negligence, it doesn’t replace insurance, and it doesn’t hide anything. Moving a property into an LLC to dodge a lawsuit or debt you already have can be undone by a court as a fraudulent transfer. Do it as planning, not as a reaction.

Step 2: Form the LLC First

The LLC has to exist before it can receive a deed. That means:

• Filing the articles of organization with your state and paying the filing fee.
• An operating agreement, even for a single-member LLC. It’s the document that shows the LLC is a real, separate business.
• An EIN from the IRS if the LLC will have a bank account, employees, or more than one member. It’s free. EIN, DBA, and operating agreement covers the details.
• A separate bank account for the property’s rent and expenses. Mixing rent with your personal money is one of the fastest ways to lose the LLC’s protection.
• Any state extras. New York, for example, requires new LLCs to publish a notice in newspapers within 120 days, which can cost a few hundred dollars upstate and much more in Manhattan.

Name the LLC exactly as it appears on the state filing. That exact name goes on the deed, the insurance, and the bank account.

Step 3: Check the Mortgage

Almost every mortgage has a due-on-sale clause that lets the lender demand full repayment if the property changes hands. A transfer to your own LLC is still a change of owner on paper.

• Fannie Mae and Freddie Mac loans. For loans they bought on or after June 1, 2016, both allow a transfer to an LLC that the original borrower controls without triggering the due-on-sale clause. Both have free loan lookup tools on their websites, so check whether either one owns your loan.
• Other loans. Bank portfolio loans, private loans, and seller financing follow their own terms. Ask the lender and get permission in writing before you transfer.
• The trust exception doesn’t cover LLCs. A federal law protects transfers of your home into a living trust from the due-on-sale clause. That protection doesn’t extend to LLCs.

Even when the transfer is allowed, the loan stays in your personal name. You keep making the payments, ideally from the LLC’s account. And if you later want to refinance with a conventional loan, the property usually has to be deeded back to you first.

Step 4: Check Your Title Insurance

Your owner’s title insurance policy protects you against problems with the property’s ownership history, like an old lien or a forged deed in the chain. The question is whether that protection follows the property into your LLC.

Newer standard policies generally keep covering a transfer to an entity you wholly own when nothing is paid for it. Older policies may not. Call the title company that issued your policy, ask whether a transfer to your LLC keeps coverage, and if not, buy an endorsement, an add-on that extends coverage to the LLC. It’s usually inexpensive compared to losing coverage.

The type of deed can matter here too. Many attorneys prefer a warranty deed, or in some states a bargain and sale deed with covenants, over a quitclaim deed for this kind of transfer, because it can help keep the title coverage chain intact. Ask your attorney or title company which they recommend.

Step 5: Check Transfer Tax and Property Tax

Transfer tax. Many states and some counties charge a tax when a deed is recorded. Many exempt transfers where the ownership doesn’t really change, like moving a property into an LLC owned by the same people in the same shares. New York, for example, treats that as a “mere change of identity or form,” but you still have to file the transfer tax forms when you record the deed. Other states charge the tax anyway. Find out before you record.

Property tax reassessment. In most places, a transfer to your own LLC doesn’t change the assessed value. But in states that limit assessment increases until a property changes owners, the transfer can matter. California, for example, excludes transfers where the owners keep the same proportional interests, but it then tracks those owners, and later changes in who owns the LLC can trigger a reassessment.

Exemptions on your home. Property tax breaks for owner-occupied homes often require the home to be owned by the people who live there. Florida’s homestead exemption and New York’s STAR credit are examples, and an LLC-owned home generally won’t qualify. On a rental this doesn’t apply, but on a house you live in, it can cost you real money every year.

Your county recorder or assessor can answer these questions for your address. A local real estate attorney can answer them all at once.

Step 6: Prepare, Sign, and Record the Deed

The deed transfers the property from you, the grantor, to the LLC, the grantee. It needs the property’s exact legal description, copied from your current deed, not just the street address.

1. Have the deed prepared. A real estate attorney or title company can draft it and the transfer tax forms for a few hundred to a couple thousand dollars, depending on your area. Doing it yourself saves money but mistakes in the legal description or the form can cause problems years later.
2. Sign it in front of a notary. If you own the property with a spouse or anyone else, every owner on the current deed signs.
3. Record it with the county clerk or recorder, along with any transfer tax forms, and pay the recording fee. Recording makes the transfer official and public.
4. Keep the recorded copy with the LLC’s records.

A reporting rule to watch. FinCEN, the Treasury’s financial crimes office, issued a rule requiring closing agents to report certain transfers of residential property to LLCs and trusts made without a bank loan, including transfers for no payment. It was set to start March 1, 2026, but a federal court in Texas struck it down on March 19, 2026, and no reports are required while the government’s appeal is pending. It could come back, so ask your title company or attorney whether anything needs to be filed when you record.

Step 7: Move Everything Else Into the LLC’s Name

The deed is only half the transfer. The LLC has to actually run the property:

• Insurance. Change the policy so the LLC is the named insured, with you as an additional insured if your agent recommends it. A homeowner’s or landlord policy in your personal name may not cover a property your LLC owns. Check that your umbrella policy still applies too.
• Leases. Assign existing leases to the LLC, tell tenants in writing, and have rent paid to the LLC’s bank account from then on.
• Bills and accounts. Property taxes, utilities you pay, and service contracts should go to the LLC and be paid from its account.
• Records. Keep the property’s income and expenses in the LLC’s books, separate from everything else you own.

Step 8: Know How Taxes Change (Usually Not Much)

• Single-member LLC. By default the IRS ignores a one-owner LLC for income tax, so nothing changes on your return. You keep reporting rental income and expenses on Schedule E, and your depreciation continues as before. The transfer itself isn’t a sale, so there’s no tax on it.
• Multi-member LLC. An LLC with two or more owners is taxed as a partnership by default and files its own partnership return each year, which adds cost. Transfers into a partnership are usually tax-free, but they can get complicated when the mortgage is bigger than your tax basis. Talk to a tax professional before you set this up.
• Your basis carries over. The LLC takes the property at your original cost minus the depreciation you’ve taken, not at today’s value.
• Selling your home later. The tax break that lets you exclude up to $250,000 of gain on your main home, or $500,000 for a married couple, still works if the home is in a single-member LLC, because the IRS treats you as the owner. A multi-member LLC is a different story.

What About the Garage Behind Your House?

This is where a lot of tradespeople start: you have a detached garage or shop building, you want to run your business out of it or rent it out, and putting it “in the LLC” sounds like the professional move. Usually, it isn’t.

• You generally can’t deed just the garage. It’s part of one lot with the house. Transferring only the garage would mean subdividing the property, which most towns won’t allow for a backyard garage. Transferring the whole property puts your house in the LLC too.
• Putting your home in an LLC costs more than it protects. Your mortgage, your homestead protection, and exemptions like STAR are all at risk, and your homeowner’s insurance has to be rewritten.
• The better setup: keep it, and rent it to your business. You keep the property in your own name, and your business LLC pays you fair rent for the garage under a simple written lease. The business gets a deductible expense, you report the rent, and nothing about the house changes. Using a house as your business office or shop covers how to set this up and the tax rule that applies when you rent to your own business.
• The real question is zoning. Who owns the garage matters far less than whether your town allows a business in it. Many residential zones limit customer traffic, employees, signs, noise, and vehicle repair at home, and some ban repair work outright. Running a business from home covers what to check first.

If you own a separate commercial building, the picture is different. Moving that building into its own property LLC and leasing it to your operating business is a common, sensible setup. Follow the same steps above.

Paperwork Is Cheap; Undoing It Isn’t

The deed takes an afternoon. Fixing a called mortgage, a lost title policy, a surprise transfer tax bill, or an uninsured LLC can take months and real money. Do the five checks first, have a professional prepare the deed, and move the insurance and bank accounts the same week you record it.

Related Guides

• Should your rental be in an LLC? for whether it’s worth it in the first place
• Buying a house through your business for the four ways to hold property
• Using a house as your business office or shop for the rent-to-your-business setup
• Piercing the veil on keeping your LLC’s protection
• Commercial leases for small business owners if you’d rather rent a shop than use your own

This article is for general informational purposes only and isn’t financial, legal, insurance, or tax advice. For guidance specific to your situation, talk to a licensed professional.

Sources

• Davis Wright Tremaine: FinCEN residential real estate rule on hold and the AIDE September 2026 status update. The rule was struck down on March 19, 2026 in Flowers Title v. Bessent, the appeal was filed May 11, and no reports are required for now.
• The Fannie Mae and Freddie Mac transfer rule for loans bought on or after June 1, 2016 is the same fact the rental LLC article already uses, verified in that article’s sources.
• The due-on-sale exception that covers living trusts but not LLCs comes from a federal law, the Garn-St Germain Act.
• On the home-sale tax break: IRS rules treat a home held in a single-member LLC as owned by you, so the $250,000 / $500,000 exclusion still works.
• On transfer tax: New York’s exemption for a “mere change of identity or form,” and California’s rule for transfers where the owners keep the same shares.
• On title insurance: newer standard owner’s policies generally keep covering a transfer to an entity you fully own when nothing is paid. The article still tells readers to check with their title company.