For a mortgaged Colorado rental, "there is no transfer tax here" is the wrong answer

The Colorado Exemption, and the Conditions That Void It

Colorado does not have a transfer tax in the sense the rest of the country uses the phrase, and the difference is not merely one of labels. What article 13 of title 39 imposes is a documentary fee, collected by the county clerk and recorder at the moment the deed is presented rather than assessed later by a revenue department. The label matters less than the measuring stick.

The measuring stick is where a mortgaged property parts company from a free-and-clear one. Section 39-13-102(2)(a) waives the fee entirely "when there is no consideration or when the total consideration paid by the purchaser, inclusive of the amount of any lien or encumbrance against the real property granted or conveyed and all charges and expenses required to be paid for the making of such grant or conveyance" falls at or below the statutory floor. Section 39-13-102(2)(b) then applies the rate to that same inclusive figure once it rises above the floor. Deed a rental you own outright to your own LLC for nothing and there is nothing to measure. Deed the same house while the LLC takes it subject to the loan, and the loan balance is what gets measured.

There is no entity exemption to fall back on. The list in § 39-13-104(1) runs to government grantors and grantees, gifts, "any deed granting or conveying title to real property in consequence of a gift of such property", public trustee, treasurer's and sheriff's deeds, corrective instruments, cemetery lots, short executory contracts, leases, security documents, future interests, decrees vesting title, transfers at death and rights-of-way. A conveyance to a company the grantor owns is nowhere in it. Colorado also puts the burden on the filer and puts it early: § 39-13-104(2) provides that "exemption from payment of the documentary fee imposed in this article must be claimed at the time a deed or instrument is offered for recording." Turning up at the counter and sorting it out afterwards is not the process the statute describes.

One thing we could not pin down, and it is the part most likely to matter to your total. It is commonly said that Colorado home-rule municipalities which had a real estate transfer tax before the 1992 TABOR amendment kept it, and that TABOR bars new ones. We could not reach a primary source for either half of that this time, the Department of Local Affairs and the Assessors' Reference Library both refused our requests, and the constitutional text we went after returned a dead link. So we are naming no municipality and asserting no municipal rate. If the property sits in a home-rule town, ask that town's clerk what it charges on a deed before you budget from the state figure alone.

We could not establish whether counties or municipalities in Colorado levy a transfer tax of their own on top of this deed. Nothing in the state chapter authorises one generally, but that is not the same as confirming none exists. A local act can sit outside the chapter we searched. Ask the register of deeds for the county the property sits in.

Authority: C.R.S. § 39-13-102(2)(a) ($500 threshold); § 39-13-104(1)(b) (gift). content.leg.colorado.gov

Does the Transfer Reset Your Property Tax in Colorado?

No. Colorado does not cap a property’s assessed value at what you paid for it, assessments track market value on the assessor’s own cycle regardless of who holds title. A deed from you to an LLC you own does not change the assessment, because there was never an acquisition-date value locked in to lose. This is the part of the California story that gets copied onto pages about states where it simply does not apply.

Colorado's reason for that answer is structural rather than a provision that says so. Under C.R.S. § 39-1-104 assessors reappraise every parcel at once on a fixed two-year cycle in odd-numbered years, valuing from sales across a defined study period rather than from individual transactions as they happen. The Larimer County Assessor puts it as "Colorado law requires Assessors to reappraise all real property, including land and improvements, every two years in odd-numbered years"; the Summit County Assessor describes the same cycle from the appraisal-date end, with the appraisal date being "June 30th of the preceding, even-numbered year." Your deed becomes one data point in somebody's sales study. It does not reset your parcel.

The benefit genuinely at risk is the senior property tax homestead exemption, and it is not the LLC that breaks it. C.R.S. § 39-3-203 requires the claimant to be "sixty-five years of age or older as of the assessment date" and to have "owned and occupied such residential real property as his or her primary residence for the ten years preceding the assessment date." Renting the house out fails the occupancy half of that test by itself, before the question of who holds title arises. We saw indications that Colorado tolerates title in a trust or an entity where the qualifying individual still occupies the home, but we could not confirm that in the statutory text we read, so we are not making the claim here.

Worth knowing how firm this answer is: the absence of a transfer trigger in Colorado rests on the shape of Title 39 and on two county assessors' own accounts of their cycle, not on a provision stating that a conveyance does not cause a reassessment. The Assessors' Reference Library would settle it cleanly and it refused every request we made.

Separately, and this catches people converting a former home into a rental: the benefits that turn on owning and occupying the property as your residence, a homestead exemption, an owner-occupancy credit, a residential assessment rate, are not things an LLC occupies a home to earn. Where the property still carries one, the deed puts it at risk, and the bill goes up whether or not the assessment itself moves. Which benefit is at stake, and on what terms, is a question for the assessor in the county the property sits in.

Authority: C.R.S. § 39-1-104, summitcountyco.gov

Moving a Property You Already Own Into the LLC in Colorado

1. 1

   Find out what the LLC will be taking the property subject to

   Pull the current payoff balance on every loan against the property before anything else. That figure, not the price on the deed, is what the documentary fee will be measured on under § 39-13-102(2), and it's also what decides whether the statutory floor saves you. A free-and-clear rental and a financed one are two different transactions in Colorado.

2. 2

   Ask the servicer in writing before you record

   Deeding to an LLC is a transfer of title and a due-on-sale clause is written to catch transfers of title. Colorado law doesn't change that. It's your loan contract. Written consent obtained before recording is a different position from a conversation after the county has indexed the deed.

3. 3

   Form the LLC and get the operating agreement done first

   The grantee has to exist before it can take title. File with the Colorado Secretary of State, adopt the operating agreement, and get the EIN and the bank account open before the deed is drawn, so the entity named on the instrument is the entity that actually exists and the rent has somewhere separate to land.

4. 4

   Have the deed drawn and take the exemption claim to the counter with it

   Colorado requires the documentary fee exemption to be claimed "at the time a deed or instrument is offered for recording" under § 39-13-104(2). Whatever exemption you are relying on needs to be identified when you present the instrument at the county clerk and recorder, not raised afterwards. Ask that office in advance what it wants to see.

5. 5

   Re-paper everything that names you as owner

   The landlord insurance policy, the leases, the security deposit account, the utility accounts and any municipal rental license all name a person who no longer owns the property. Nothing prompts you to update them and a mismatched named insured is a problem that surfaces at claim time rather than at recording.

One LLC Per Property, or One for the Portfolio?

Colorado has no series LLC statute, so separating properties means a separate LLC for each one.

That negative is not an inference from silence. The Colorado Limited Liability Company Act is C.R.S. title 7, article 80, and a full-text search of the article for "series" returns nothing at all, not a section, not a clause, not a stray mention. Searching the whole of title 7 for "protected series," "registered series," "separate series," "designated series" and "series of members" returns zero for each; the dozens of hits on "series" elsewhere in title 7 are all about classes or series of shares in corporations and cooperatives, which is a different animal. Colorado has not adopted the Uniform Protected Series Act. The act is equally silent about a series formed somewhere else, so there is no Colorado provision telling you what happens to a Delaware series that owns a Denver duplex.

There is a Colorado-specific cost to the one-LLC-per-property answer that gets missed, and it is the same documentary fee from the top of this page. Each property you move needs its own deed, and each deed is measured on consideration inclusive of that property's lien. Five financed rentals is five encumbrance-measured fees, not one. The individual amounts are small; the point is that they are not zero and they arrive at the recorder's counter at the same time as the recording fees, the new registered agent and the fifth bank account.

One edition caveat on the search above. The Office of Legislative Legal Services publishes each title of the revised statutes as a PDF, and the 2024 printout of title 7 is the current published edition on that host. A 2025 file does not exist there. If the legislature has acted since, this answer would not yet show it.

Practically, that leaves the familiar trade-off. Separate LLCs mean separate filing fees, separate annual reports, separate registered agents and separate bank accounts, every year, for as long as you hold the properties. One LLC holding several properties means one set of costs and one pool of assets exposed to a claim arising at any of them. Which side of that you land on is a function of how much equity is in the portfolio, and it is worth pricing the recurring cost before deciding, our Colorado LLC cost breakdown has the per-entity figures.

What Creditors Can Reach, What the Colorado Statute Says

The reason to hold a rental in an LLC is usually to keep a claim arising at the property from reaching everything else you own. The reverse question matters just as much and gets far less attention: if someone wins a judgment against you personally, can they reach the rental inside the LLC? That is what a state’s charging-order provision decides.

Colorado's LLC act contains no exclusive-remedy provision.

Colorado's charging order section is C.R.S. § 7-80-703, headed "Rights of creditor against a member," and what makes it unusual is what it leaves out. It authorises the court to "charge the membership interest of the member with payment of the unsatisfied amount of the judgment," to "appoint a receiver of the member's share of the profits and of any other money due or to become due to the member," and to "make all other orders, directions, accounts, and inquiries that the debtor member might have made, or that the circumstances of the case may require." It then provides that "to the extent so charged, except as provided in this section, the judgment creditor has only the rights of an assignee or transferee of the membership interest."

Nowhere does it say the charging order is the sole or exclusive remedy. We read the section in full and the words are not in it, which is the whole of what we can report. The absence is a fact about this text, not a ranking against anyone else's.

The section also does not distinguish a company with one member from a company with several. No form of "single member," "one member" or "sole member" appears in it. Whether your rental LLC has you alone in it or you and a partner, § 7-80-703 reads the same way.

On foreclosure, we want to show you the text rather than a conclusion, because this is the one judgment call in the Colorado record. The section does not contain a sentence of the form "the court may order a foreclosure sale." What it does contain is "the membership interest charged may be redeemed at any time before foreclosure" and "if the sale is directed by the court, the membership interest may be purchased without causing a dissolution with separate property by any one or more of the members." That is language which presupposes a court-directed sale and legislates around it. We have quoted both phrases so you can read them the way your own lawyer reads them. The section's most recent amendment shown is from 2006.

We are reporting what the section says, not what a court would do with your facts. Outcomes turn on how the LLC was capitalised, how it has been operated and what the creditor is owed, and none of that is something a page can assess. If the answer above is load-bearing for you, it is a question for a Colorado attorney.

Authority: C.R.S. § 7-80-703, leg.colorado.gov

Three Problems No State Transfer Rule Solves

These land the same way in Colorado as everywhere else. One because it is federal law, two because they are contracts you signed. Which is exactly why they get left off state pages. They are also the three most likely to actually cost a landlord money, so they are here rather than buried.

The due-on-sale point is the one that generates the most bad advice. The Garn-St Germain Depository Institutions Act, at 12 U.S.C. § 1701j-3(d), bars a lender from enforcing a due-on-sale clause on nine categories of transfer of residential property of fewer than five dwelling units. The one people cite is the eighth: a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property. Neither that paragraph nor any of the other eight names a transfer to a limited liability company. The protection quoted for an LLC transfer is written for trusts, and the occupancy qualifier is the limb that matters most to a landlord, because a rental is occupied by someone else.

One honest caveat on that list. The ninth category is open-ended. It reaches any other transfer described in regulations issued under the Act, at 12 C.F.R. § 591.5(b), so it is a list that can be extended by regulation rather than a closed set fixed by the statute. We have not read those regulations end to end, and say so rather than describing the statute as more settled than we checked.

In practice lenders often do not call a loan when payments keep arriving, and that is genuinely what usually happens, but “usually not enforced” is a different thing from “not permitted,” and only one of them is a plan. The way to find out is to ask your servicer for written consent before you record, not after.

Which deed you use is a decision, not a formality. A quitclaim deed transfers whatever interest you happen to have and warrants nothing, which is why it is the cheap default for a transfer between yourself and your own company, and why title professionals warn against it. It can leave a gap in the chain of title that surfaces years later when you sell or refinance, and because it warrants nothing it gives the LLC no recourse against you if a defect turns up. A warranty deed carries the covenants across. Which one is appropriate depends on how the property was acquired and what your title history looks like, and it is a question worth asking before the deed is drafted rather than after it is recorded.

Tell your title insurer before you record. An owner’s title policy insures the person named in it. Convey the property to an LLC and the insured owner and the record owner are no longer the same. Which is the fact pattern in which coverage gets argued about at the worst possible moment, when a claim is already live. Some insurers will endorse an existing policy across to the entity, sometimes for a modest fee; some will not, and a new policy means a new premium on the current value. Either way it is a phone call before the deed rather than a discovery afterwards, and it belongs in the same budget as the tax above.

On the fourth thing people ask about: beneficial ownership reporting. Under 31 C.F.R. § 1010.380, a “reporting company” is an entity formed outside the United States and registered to do business in a State, and paragraph (c)(2)(xxiv) separately exempts any entity created by filing with a Secretary of State. A rental LLC you form in Colorado is therefore exempt and files no beneficial ownership report. Pages telling you to file within 30 days of formation are describing the rule as it stood before March 2025. The exception runs the other way: an LLC formed in another country and registered to do business in Colorado does still report. More on what compliance actually requires →

Does Colorado Make You Register the Rental?

Not at the state level. Colorado runs no statewide rental registry, so registration is a municipal question, and what a municipality may require varies, in some states a city can impose an annual licence with an inspection, and in others state law caps or forbids local registries outright. The LLC does not change the answer either way: the duty attaches to the rental unit, not to the form of the owner. Check with the city or county the property sits in.

There is one statewide rental register in Colorado law and it will not apply to you unless you own a mobile home park. C.R.S. § 38-12-1106(1) provides that "the division shall register all mobile home parks on an individual basis and renew this registration annually," and § 38-12-1106(4) requires the landlord to file the division's form and pay a registration fee. That programme is run by the Colorado Division of Housing and is charged per lot rented to a mobile-home-owning tenant. Nothing equivalent exists for a house, a condominium or an apartment building. Municipal rental licensing and short-term-rental permitting are a separate matter entirely and several Colorado municipalities run them.

leg.colorado.gov

If You Rent Short-Term in Colorado

A short-term let is a different tax animal from a twelve-month tenancy, and the LLC has nothing to do with it. The lodging tax follows the stay, not the owner.

The line between a taxable stay and an exempt one in Colorado is not a night count on its own. C.R.S. § 39-26-704(3)(a) exempts sales to "any natural person who is a permanent resident" of the accommodation "and who enters into or has entered into a written agreement for occupancy of a room or accommodations" for the statutory minimum period.

The written agreement is a condition of the exemption, so a guest who simply books consecutive nights through a platform and stays past the threshold has not met it. There is also a gap in what the platforms cover: the Department of Revenue collects the state tax, county lodging tax and local marketing district tax through marketplace facilitators, but states plainly that it "does not administer any lodging taxes imposed by any municipality within Colorado." A municipal lodging tax is between you and the municipality.

A platform collecting the state tax does not always cover every local tax on the same booking, and it never covers a booking taken directly. If you take reservations off-platform as well, that is where the exposure sits.

Authority: C.R.S. §§ 39-26-104(1)(f), 39-26-106(1)(a)(II), 39-26-704(3), 39-26-105(1.5), tax.colorado.gov

Who to Ask in Colorado

The county clerk and recorder is the office that actually collects the documentary fee and takes the deed, and it's the right first call about whether your instrument qualifies for an exemption and what has to be on its face to claim one at the counter. Property value questions go to the county assessor, whose office runs the odd-year reappraisal. The Colorado Division of Property Taxation administers the senior exemption and the Assessors' Reference Library, though be warned that both refused our automated requests and you may need to phone. The Colorado Division of Housing runs the mobile home park register. The Department of Revenue handles state sales tax on lodging, county lodging tax and local marketing district tax, but not municipal lodging taxes, which are the municipality's own.

Forming the LLC Itself

Nothing about the formation process changes because the LLC will hold rental property, the articles, the registered agent requirement and the annual filing are the same as for any other Colorado LLC. The walkthrough lives in the formation guide rather than being repeated here.

How to start an LLC in Colorado →

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