Transferring property to an LLC in Texas takes three mechanical steps: draft a new deed naming the LLC as grantee, sign it before a notary, and record it with the clerk in the county where the property sits. The mechanics are the easy part. Before you sign anything, work through what the transfer does to your mortgage, your homestead status, and your title insurance, because those are where this move goes wrong.
Check Your Mortgage First
If there’s a loan on the property, your deed of trust almost certainly contains a due-on-sale clause. Federal law defines that clause as any contract term letting the lender accelerate the debt when the borrower sells or transfers the secured property or any interest in it.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions Moving the deed to your LLC is a transfer.
The Garn-St Germain Act lists specific exemptions where the lender cannot enforce the clause, including transfers into an inter vivos trust where the borrower stays a beneficiary. A transfer to an LLC is not on that list.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions In practice, many lenders don’t call the loan when payments are current and the borrower still controls the LLC. Rarely enforced is not the same as can’t happen. If you fall behind or the lender’s policy shifts, they retain the legal right to demand the full balance. Ask your lender for written consent before you record the deed.
Don’t Do This With Your Primary Residence
Texas homestead protection is among the strongest in the country. The Texas Constitution shields a homestead from forced sale for virtually all debts except purchase money liens, property taxes, and a few other specific encumbrances.2Justia. Texas Constitution Article XVI Section 50 The Texas Tax Code adds a significant property tax exemption, including a $100,000 exemption from school district taxes, but it defines a residence homestead as a structure owned by one or more individuals, directly or through a beneficial interest in a qualifying trust.3State of Texas. Texas Tax Code Section 11.13 – Residence Homestead An LLC is neither.
The day your primary home is titled to an LLC, you lose the creditor protection and the tax exemption. The property becomes reachable by the LLC’s creditors, and the tax bill goes up. That trade rarely makes sense. Rental and investment properties don’t carry homestead protections to begin with, which is why they’re the properties this transfer is built for.
Title Insurance Doesn’t Follow Automatically
Your existing owner’s policy protects the named insured, which is you. When the LLC becomes the record owner, the policy does not extend to it on its own. Call your title insurer before the transfer and ask whether they’ll issue an endorsement adding the LLC as a covered party. Some insurers will; others require a new policy for the LLC. Either result is fine. Leaving the LLC uncovered is not.
Choosing Between a General and Special Warranty Deed
Two deed types come up for this kind of transfer in Texas.
A general warranty deed guarantees the title all the way back to the property’s origins, not just during your ownership. If a defect from decades ago surfaces, the LLC could look to you personally on that warranty.
A special warranty deed limits the guarantee to defects that arose while you owned the property. You promise you didn’t create any title problems; you make no promise about anything before your ownership.
For a transfer from yourself to your own LLC, the special warranty deed is the usual choice. You’re both sides of the transaction, so the broader guarantee has no one to protect.
What Goes in the Deed
The deed is a short document, but small errors in names or the legal description can cloud title later and cost far more to fix than to get right the first time.
- Grantor: your full legal name, spelled exactly as it appears on the current deed. If you took title under a different name, such as a maiden name, reference both.
- Grantee: the LLC’s full legal name as registered with the Texas Secretary of State, including “LLC” or “Limited Liability Company.” Don’t abbreviate or alter it.
- Legal description: the metes and bounds or lot-and-block description from the existing recorded deed or a survey. A street address is not enough. Appraisal district descriptions are sometimes abbreviated and shouldn’t be relied on without checking the recorded deed.
- Consideration: Texas does not require the deed to state the actual value exchanged. Transfers to your own LLC typically recite a nominal amount such as “$10.00 and other good and valuable consideration.”
Notarizing and Recording
Sign the deed in front of a notary public. Texas law requires the grantor to appear before the officer and acknowledge that they executed the instrument for the purposes and consideration stated in it.4State of Texas. Texas Civil Practice and Remedies Code Section 121.004 – Method of Acknowledgment Without that acknowledgment, the county clerk cannot record the deed.5State of Texas. Texas Property Code Section 12.001 – Instruments Concerning Property
Take the notarized deed to the county clerk in the county where the property is located. You can file in person or by mail. Under the Texas Local Government Code, the base filing fee for a real property instrument is $5.00 for the first page and $4.00 for each additional page, with several mandatory county add-ons on top.6State of Texas. Texas Local Government Code Section 118.011 – Fee Schedule The total for a standard deed usually runs between $15 and $30 depending on the county and page count. Confirm the exact amount with the clerk before mailing a check, because the wrong amount comes back rejected. Once the clerk records the deed, the transfer is complete as a matter of public record. Texas imposes no state real estate transfer tax.
What to Do After Recording
Recording is not the finish line. A handful of follow-ups are easy to miss and can undo the point of the transfer.
- File a change-of-ownership form with the county appraisal district so future tax notices and correspondence route to the LLC. If a homestead exemption was mistakenly attached to a rental property, this cleans that up.
- Update hazard and liability insurance so the LLC is the named insured or an additional insured. A policy in your personal name may not cover claims against the LLC once the LLC is the legal owner.
- Assign existing leases to the LLC or execute new ones. Rent should flow into an account in the LLC’s name, and security deposits should be held by the LLC.
- Follow up with your title insurer for the endorsement or replacement policy covering the LLC.
Federal Tax Treatment
Single-Member LLC
If you are the sole owner, the IRS treats the LLC as a disregarded entity by default. The transfer is a non-event for federal income tax purposes, and no special form is required solely because of it.7Internal Revenue Service. Single Member Limited Liability Companies You continue to report the property’s income and expenses on your personal return, with rental income typically on Schedule E. The LLC does not file its own federal income tax return unless you’ve elected corporate treatment.
Multi-Member LLC
An LLC with more than one member is treated as a partnership by default. A property contribution in exchange for a partnership interest is generally non-taxable under IRC Section 721.8Office of the Law Revision Counsel. 26 USC 721 – Nonrecognition of Gain or Loss on Contribution The LLC will need to file Form 1065 and issue a Schedule K-1 to each member, and the tax picture is meaningfully more complex than for a disregarded entity. Talk to a tax professional before recording.
Keep the Liability Shield Intact
The reason to put a property in an LLC is to keep lawsuits about the property away from your personal assets. That protection depends on operating the LLC as a real, separate entity. Courts pierce the veil when the LLC is really just you under another name.
Commingling funds is the most common failure. Rental income should flow into a bank account in the LLC’s name. Property expenses should be paid from that account. Paying personal bills from LLC funds, or dropping rent checks into your personal account, is the exact pattern a plaintiff’s attorney will point to.
Beyond the bank account, sign property-related contracts in the LLC’s name, with you signing as a member or manager rather than in your personal capacity. Keep basic records. Document major decisions in writing. If you have an operating agreement, and you should, it should cover how the property is managed, how profits and losses are allocated, and what happens if a member exits. These are the facts a court weighs when deciding whether to respect the LLC.
Franchise Tax and Annual Filings
Texas has no state income tax, but it does have a franchise tax that reaches most LLCs doing business in the state. As of 2026, LLCs with total revenue at or below $2,650,000 owe no franchise tax, but they still have to file an annual Public Information Report or Ownership Information Report with the Texas Comptroller by May 15.9Texas Comptroller. Franchise Tax Miss the filing and the Comptroller can forfeit the LLC’s right to do business in Texas, which strips the liability protection you set the LLC up for. A small single-property LLC will likely owe nothing, but the filing itself is not optional.