Deeding a NYC Rental Into Your LLC: Transfer Taxes, Filings, Your Mortgage and Your Title Policy

Usually no transfer tax is due, but only to the extent the owners keep the same shares in the LLC that they had in the property. That applies to both the New York State transfer tax and the NYC Real Property Transfer Tax (RPTT). You still have to record the deed and file full tax returns. For one- to four-family buildings, the returns must list the LLC’s members.

The two problems that most often come up later are the mortgage and the title policy. The transfer can put your existing mortgage in default. And your owner’s title policy follows the property into the LLC only if the LLC fits the policy’s definition of who is insured.

This guide covers NYC deeds. The State tax and its exemption apply statewide. The RPTT and the City Register filing process apply only in the five boroughs.

Transfer taxes: the “mere change of identity” exemption

Both taxes have the same exemption. It covers a deed that only changes the form of ownership, such as from you personally to your own LLC, with no change in who really owns the property.

  • State transfer tax. State law exempts deeds that make “a mere change of identity or form of ownership or organization where there is no change in beneficial ownership” (state tax law). “Beneficial ownership” means who actually owns the value, whatever the name on the deed. The State applies the exemption in proportion: the deed is exempt to the extent the owners end up with the same shares in the LLC, and taxable to the extent they don’t (State tax regulation).
  • NYC RPTT. The City has its own version. The NYC Department of Finance (DOF) calls it “exempt but reportable”: no tax on the exempt share, but you still file a return. The exemption applies “only to the extent that the beneficial ownership remains the same.”

How it works out:

Who owns before Who owns the LLC after Result
You, 100% You, 100% Exempt
You and spouse, 50/50 You and spouse, 50/50 Exempt
You, 100% You 60%, partner 40% 40% taxable
You and sibling, 50/50 You 70%, sibling 30% 20% taxable

The taxable share is measured against the full price or value given for the deed. If tax is due, RPTT on residential property (such as a one- to three-family house or a residential condo unit) is 1% up to $500,000 and 1.425% above. Most other property is 1.425%, or 2.625% above $500,000 (DOF RPTT page). The State tax is $2 per $500 of the price. An extra State rate applies to NYC deeds of $3 million or more for residential property and $2 million or more for other property (state tax law).

Later changes to the LLC can undo the exemption

The tax agencies look at what really happened, not just the deed. In a 2025 case, owners deeded a building to an LLC and claimed the full exemption. About two months later, a developer joined the LLC as a 40% member. The NYC Tax Appeals Tribunal treated the two steps as one deal and allowed the exemption only for the 60% the original owners kept (Blank Rome summary). If you plan to bring in an investor or sell shares of the LLC, that plan affects how the deed should be reported. A later transfer of a controlling share in the LLC can also be taxed on its own, under both taxes.

Moving property into an LLC can also change the tax on the next sale. A 2025 DOF ruling, described at the end, shows how.

Filings for the deed into the LLC

In Manhattan, Brooklyn, Queens and the Bronx, the deed is recorded with the City Register through ACRIS, the city’s online land records system. For Staten Island, the returns are filed through ACRIS and also on paper with the Richmond County Clerk (DOF).

  • State return (TP-584-NYC) and city return (NYC-RPT). Both are required even when no tax is due (state tax law; DOF). You claim the exemption on these returns, so the percentage you claim must match the LLC’s actual ownership. The city return is due within 30 days of the transfer.
  • List of LLC members. When an LLC gives or receives a deed to a residential building with up to four family units, a member list is required. The State return isn’t accepted without a list of the names and business addresses of all members, managers and other authorized people (state tax law). If a member is itself a company, its owners must be listed too, until you reach real people. DOF applies the same rule to city returns for one- to four-family deeds dated on or after September 13, 2019. DOF also asks for members’ ID numbers, or a sworn statement explaining what is missing. Larger buildings fall outside this rule.

The NY LLC Transparency Act is a separate law, and narrower than its name suggests. It took effect January 1, 2026. After Governor Hochul vetoed a bill to expand it on December 19, 2025, it applies only to LLCs formed outside the United States that are registered to do business in New York (Willkie; Baker McKenzie). A New York or Delaware LLC holding a rental does not file under it.

Your mortgage: the risk the lender calls the loan

Deeding the property to your LLC doesn’t move the mortgage. The lien stays on the property, and you stay personally liable on the loan. Most home mortgages have a “due-on-sale” clause: the lender can demand the whole loan be repaid if the property is transferred without its consent.

A federal law bars lenders from using that clause for certain transfers of homes with fewer than five units (federal law). Examples are a transfer to a spouse, or into a living trust where you remain a beneficiary. A transfer to an LLC is not on that list.

What protects some borrowers is the loan investor’s own rules. Fannie Mae allows a transfer to an LLC without calling the loan if all of these are true (Fannie Mae servicing rules):

  • Fannie Mae bought or securitized the loan on or after June 1, 2016.
  • The original borrower controls the LLC or owns most of it.
  • Any change to using the home as an investment property doesn’t violate the mortgage.

The loan servicer must also tell you the property will need to move back to a person’s name before you can refinance. Bank-held, portfolio and commercial loans follow their own documents.

Before recording, find out who owns your loan and get the lender’s or servicer’s position in writing. For a commercial or portfolio loan, that usually means formal consent.

Your title policy: does it follow the property into the LLC?

An owner’s title policy normally ends when you transfer the property. Whether the LLC takes over your coverage depends on which policy form you have.

  • 2021 policy form. New York switched to the 2021 national (ALTA) policy forms on October 1, 2024 (Mann Report). The 2021 owner’s policy covers a new owner that is an “Affiliate” of the insured. That means a company the insured wholly owns, a company that wholly owns the insured, or a company owned by the same person or company that wholly owns the insured.
  • 2006 policy form. Older policies cover a company wholly owned by the named insured, but only if the deed was given without real payment (2006 owner’s policy).

“Wholly owned” is read literally. In one out-of-state federal case, a 99.9% owner did not qualify (Riker Danzig summary). An LLC with any member besides the insured, including a spouse who wasn’t on the policy, may not qualify.

Even when the LLC qualifies, the insurer keeps every defense it had against you. Coverage still runs only to the original policy date. Nothing after that date is insured, including the deed into the LLC itself.

Situation Policy follows to LLC?
2021 form, LLC 100% owned by the named insured Yes, as an Affiliate
2006 form, 100% owned, no payment Yes
LLC has a member not named on the policy Likely not
Policy issued to two co-owners, LLC owned by both Unclear; ask the insurer

If the policy won’t follow, or you want coverage through the transfer date, the LLC can buy a new owner’s policy. It is priced like any owner’s policy under New York’s title rate manual. The policy amount can’t be less than the contract price or the fair market value, whichever is greater (title insurance cost). The rate manual has no discount for a transfer to your own company. A new policy also means a new title search, which picks up any liens or judgments filed against you since you bought.

Before you record: a short checklist

  1. Confirm the LLC’s ownership shares match the current owners’ shares, or work out the taxable share.
  2. Prepare the TP-584-NYC and NYC-RPT in ACRIS, with the member list for one- to four-family buildings.
  3. Get the lender’s or servicer’s position on the transfer in writing.
  4. Ask the title insurer whether the LLC is covered under your policy form, or order a new owner’s policy.
  5. Check the recorded deed in ACRIS, and consider DOF’s free recording alerts.

Details for attorneys and title professionals

  • The 2025 Tax Appeals Tribunal case. The Tribunal reversed an administrative law judge who had ruled for the taxpayer, and upheld DOF’s tax bill. It treated the deed and the developer’s entry as one transaction (the “step transaction” approach). The decision was dated September 3, 2025; the citation is in Official sources.
  • The 2025 DOF ruling on a later sale. A nonprofit college deeded a property to its single-member LLC for no payment, so a lender could hold the property in an entity shielded from the college’s bankruptcy. DOF accepted that transfer as exempt under the mere change of identity rule. The question was the LLC’s later sale to a third party. The college’s own sale would have been exempt as a nonprofit. But DOF held the LLC’s sale was taxable, because the lender-driven structure meant the college did not fully control the LLC. DOF said a deal is taxed “based on the deal structure” the parties chose. The ruling, dated January 22, 2025, does not analyze the mere change exemption itself.
  • Policy wording. The 2006 form covers a wholly owned grantee only under a deed “delivered without payment of actual valuable consideration.” The condition numbers are in Official sources.
  • The 99.9% case. A federal court in western Pennsylvania decided it on October 8, 2021. It is not binding in New York.

Official sources

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Korvane Title is preparing to launch in New York. It is not licensed as a title insurance agent and does not accept title orders. Content on this site is general information, not legal advice.