Why do experienced and sophisticated buyers in NY use LLCs to take title to new properties?
A review of public property records and coverage of the most notable NY property sales from Property Shark shows that experienced buyers, wealthy families, and high level real estate investors almost exclusively use Limited Liability Companies (LLCs) to hold title to their properties. Why do they do it?
The Benefits of LLCs for Buying & Holding Real Estate
There are multiple reasons that LLCs are frequently chosen as the go to entity for buying real estate. Some of the reasons given in recent reports by attorney Matthew C Mullhofer in California, and Fuquan Bilal founder of the National Note Group in New Jersey include…
- The low cost of incorporating an LLC
- Low ongoing regulatory and paperwork burden
- Avoiding double taxation
- Great flexibility in operating
- Access to an additional layer of tax write-offs and deductions
- Privacy protection
The net effect is a highly efficient and affordable tool for reducing overall taxes, and keeping your information private.
LLCs are not just tools used by investors and big fund managers. They can be used by regular individuals too. Some use trusts, or other corporate entities, but LLCs appear to have become most popular.
The Property Tax Exception
LLCs won’t directly lower your NY property taxes. In fact; they may at least at first cause some quirks with tax breaks and exemptions that homeowners normally get. It’s definitely worth investigating the benefits of LLCs and similar tools. However, all will still want to also regularly check and challenge their property tax bills for overcharges and incorrect valuations. This is true for both regular home buyers and the most active real estate investors.
Speak with your personal financial, legal, and tax advisors about the potential benefits of an LLC for you. And connect with the experts at Property Tax Adjusters, Ltd. to lower your property taxes.