The simplest and most cost-effective way to transfer your real estate to your limited liability company (“LLC”) is by quitclaim deed. A quitclaim deed is a deed that transfers property “as is” to another party.
Here are some things to consider when transferring your real estate to your LLC:
Homestead – If your property is your homestead, then it will lose its homestead status when you transfer it to your LLC.
Mortgage – If you have a mortgage, then you will need to contact your lender and obtain their consent to transfer the property to your LLC. The reason for contacting your lender is because many mortgages have a “due on sale” clause that may be triggered when the property is transferred. The “due on sale” clause causes the entire balance of the mortgage to become due immediately.
Transfer tax – If there is a mortgage on the property or money is changing hands to effectuate the transfer, then there will likely be a transfer tax called documentary stamp tax owed to the Florida Department of Revenue. In all counties in Florida, except Miami-Dade County, the documentary stamp tax is $0.70 per $100 of the outstanding mortgage or amount paid to transfer the property. In Miami-Dade County, documentary stamp tax is $0.60 per $100 of the outstanding mortgage or amount paid to transfer for residential property and, if the property is non-residential, an additional $0.45 per $100 of the outstanding mortgage or amount paid to transfer.
Leases – Do not forget to change the landlord of any current leases to your LLC.