Avoiding transfer tax with transfer to LLC

[Mark Miles]

I know a lot of people write on here about transferring title to an LLC after closing. I'm curious - is everyone paying the transfer tax when they do this? It's particularly onerous in Pennsylvania, which charges a transfer tax of 2-4% of the property's value, depending on which PA jurisdiction (I believe this to be one of the heftiest transfer taxes in the nation).

There are a few cases in which you don't need to pay the transfer tax, but transferring title from personal name to LLC is NOT one of those exceptions. According to (c)(1) below, if you were transferring the property into a living trust (per the St Germain Act), the transfer WOULD be exempt from transfer tax IF you were PERSONALLY listed as the beneficiary. If, however, your LLC (which is of course a separate entity from you personally) is the beneficiary (which is what you need in order to gain the desired asset protection), then you must indeed pay the transfer tax:

https://www.pacode.com/secure/data/061/chapter91/s91.156.html