Property tax spiked after transferring to LLC ?

Question

Has anyone experienced a huge spike in property tax after transferring your investment property to a LLC ?  especially for investment properties in NYC for those who are familiar

Thanks

Mary Joe · Answer

@Jose Moya

Someone mentioned that his/her ppty tax skyrocketed after transferring the ppty to a LLC. I forgot where I saw that, and not sure which state he/she was in.  I came across below on how to avoid ppty tax hike for CA:

"To avoid property tax reassessment, do NOT transfer real property from individuals to a legal entity (trust, LLC, Corp, etc) UNLESS the individuals have the same proportionate interest in the legal entity as they did in the real property! Let’s say that that you and your wife own a property 50% each. And you want to establish an LLC for that property and add your son to title. So you establish an LLC in which you own 35%, your wife owns 35% and your daughter owns 30%. This method will trigger a reassessment of your property taxes! The way to avoid this is to FIRST add your daughter to title as 35%, 35%, and 30% owners. THEN establish the LLC with the same proportionate ownership interests within the LLC. That will NOT trigger a reassessment."copied from this link https://santaclaritamagazine.c...

Nathan Gesner · Answer

Any time property transfers ownership, it can trigger a property tax review. I've never had this happen to me in Wyoming, but I suspect it's not uncommon. You can always try contesting it.

Johann Jells · Answer

Pretty sure this is specific to Prop 13, which locks taxes to a very low increase for owners while it goes up tremendously for new buyers. Horrible market distorter.

Mohammed Rahman · Answer

Wow this is really good to learn and know, thanks for sharing!

Johann Jells · Answer

This may be a NYC specific thing, residential property taxes there are way under the local metro area market. It could be it moved you out from under the subsidy program.

Jose Moya · Answer

@Mary Joe Wow, I was seriously just asking a friend this question; if it was smart to purchase a property and then transferring it over to the LLC. I am actually looking forward to see what response you get.  -Jose M

Property tax spiked after transferring to LLC ?

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