LLC for Rental Property: What the Transfer Costs in Each State

Why the transfer, not the formation, is the expensive part

Almost everything written about rental LLCs answers one question. Should you put your rental in an LLC, and stops at the answer. That leaves out the part that actually costs money. If you already own the property, putting it in the LLC means signing a deed conveying it from you to the entity, and recording that deed.

Three things can happen when you do, and they are decided by three different bodies of state law that rarely appear on the same page:

• Real estate transfer tax. Most states tax the conveyance of real property. Many exempt a transfer to an entity the grantor owns, but the exemptions carry conditions, and the most common trap is that a mortgage the LLC takes the property subject to counts as consideration, so a “$1” deed on a financed rental is not a nominal transfer.
• Property tax reassessment. In most states this is a non-issue, because assessments track market value every year regardless of who holds title. In the handful that cap assessed value at an acquisition-date figure, a transfer can reset that cap permanently. A recurring cost that dwarfs any one-time tax.
• Your mortgage. This one is federal and identical everywhere. The Garn-St Germain exemption at 12 U.S.C. § 1701j-3(d) that people cite for LLC transfers is written for transfers into a trust. It does not list limited liability companies.

The table below states the position for each of the first two as of August 6, 2026, with the statute behind each answer linked from the state guide.

Moving a rental into an LLC, all 50 states

50 of 50 state guides published. The $300,000 column illustrates each state’s rate; it is not an estimate of your property. Every figure verified against the state’s own statute, revenue department or housing agency on August 6, 2026. Formation-service blogs were not used as the basis for any claim.

One LLC per property, or one for the portfolio?

This is the most-asked question in the category and the state-law part of the answer is narrow: 22 states authorise series LLCs, which let one filing hold several properties in compartments that the statute treats as separate for liability purposes. The other 28 do not, so separating properties there means a separate LLC for each one, with a separate filing fee, annual report, registered agent and bank account, every year, for as long as you hold them.

The rest of the answer is arithmetic rather than law. Run the recurring cost of one extra entity in your state against the equity you are trying to wall off, and the decision usually makes itself. Our LLC cost by state breakdown has the per-entity figures.

One thing worth knowing before relying on any of it: in 8 states, the LLC act expressly treats a single-member LLC differently from a multi-member one when a creditor comes after the owner personally, and a single-member LLC is the default structure for a rental. The state guides say which, and quote the section.

What is the same in every state

Three consequences of the transfer do not vary by state, so they are worth knowing once rather than fifty times:

• Due-on-sale. Deeding the property to an LLC is a transfer of title, which is what a due-on-sale clause exists to catch. The Garn-St Germain protection at 12 U.S.C. § 1701j-3(d) covers transfers into an inter vivos trust where the borrower stays a beneficiary, not transfers to an LLC. Lenders frequently do not call the loan, but that is forbearance, not a right. Ask your servicer for written consent before you record.
• Insurance. Your landlord policy names you as the insured. After the deed the owner is the LLC, and the mismatch surfaces at claim time rather than at closing. The policy has to be reissued or endorsed.
• 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 any state files no beneficial ownership report. Pages telling you to report within 30 days 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 here does still report.

None of these change with your state. What does change is the tax on the deed and what happens to your assessment, and that is what the table above tracks.