In recent years, it’s become more and more common to see luxury real estate bought and sold through a limited-liability corporation. So, what exactly is the driving force behind this rising trend? Well, here are just a few things that you should know about using an LLC for your real estate holdings.
The number one reason for doing so is, of course, privacy. Using an LLC makes it more difficult for someone to snoop around and view your real estate portfolio or see how much you paid for your home because your name does not actually appear on the title. In today’s day and age, when everything seems to be in the public domain, this is a major draw for anyone who values discretion.
Owning your home through an LLC will also protect you from personal liability. For example, in the unfortunate event that someone were to be injured on your property and file a lawsuit, it would be against the LLC and the rest of your assets would be protected from any exposure.
Using an LLC can also affect your tax responsibilities and the extent to which it does varies by state. While it will likely mean having to file a separate tax return for the LLC, in many circumstances there are tax benefits to be had by going this route, meaning that it can save you money in the long run.
Work With Specialists
If you’re interested in forming an LLC to purchase your next home—or transfer the title of a current property—be sure to start by consulting with an attorney and tax advisor who is experienced in the matter. A specialist will be able to seamlessly navigate you through the process and ensure that you achieve all of your goals.