Many California investors hold rental property in an LLC to separate each property’s risks from their personal assets and to keep their name off public records. Each LLC owes the $800 annual tax, plus an LLC fee once gross receipts, which include rents, reach $250,000. Before deeding a property you already own to an LLC, check your mortgage, property tax reassessment rules, transfer tax and title insurance with a real estate attorney and CPA.
Why investors use an LLC
- Liability separation. A claim tied to a property is generally limited to the LLC that owns it, as long as the LLC is kept separate, with its own bank account and records.
- Privacy. When an LLC owns the property, the deed lists the LLC as the owner, not you. Documents the LLC signs later, such as a loan or sale, may show the signer’s name, so plan who signs. With our LLC with privacy, your name and address are also kept off the Secretary of State filings, so tenants and the public can’t easily connect the property to you.
- Co-investors. The Operating Agreement sets each partner’s share, who decides what and how a partner can exit.
What it costs each year
Every California LLC owes the $800 annual tax and files a Statement of Information every two years. LLCs with California gross receipts of $250,000 or more also pay the LLC fee. Gross receipts means total rents collected before expenses, so a property can trigger the fee even if it shows a tax loss.
One LLC or several?
Owners with several properties often use a separate LLC for each one, so a problem at one property doesn’t reach the others. Each LLC pays its own $800 a year, so weigh the protection against the cost.
California does not let you form a series LLC. A series LLC formed in another state can operate here, but the Franchise Tax Board treats each series as a separate LLC that owes its own $800.
Out-of-state LLCs owning California property
An LLC formed in another state, such as Wyoming or Delaware, that owns and rents out California property is generally doing business in California. It must register with the Secretary of State and pay the $800 annual tax, so forming out of state usually adds cost rather than saving it.
Before you move a property you own into an LLC
- Mortgage. Most loans have a due-on-sale clause that a transfer to an LLC can trigger. Talk to your lender first.
- Property tax. A transfer where your ownership share stays the same is generally excluded from reassessment, but later transfers of LLC interests can trigger it. A change in control of an LLC that owns California property must be reported to the Board of Equalization on Form BOE-100-B within 90 days.
- Transfer tax. County and some city documentary transfer taxes may apply. Exemptions can apply when ownership stays proportional.
- Title insurance. Your existing policy may not protect the LLC after the transfer. Ask your title company about an endorsement.
- Insurance and leases. Put the property insurance and the leases in the LLC’s name.
We form LLCs; we don’t prepare deeds or give legal or tax advice. Have a real estate attorney prepare and record the deed.
Sources: Franchise Tax Board, LLCs; Board of Equalization, legal entity ownership.
Questions
Should I put my home in an LLC?
Owners rarely do. It can complicate your mortgage and property tax exemptions, and the liability benefits are limited for a home you live in. Talk to a real estate attorney before deciding.
Does my rental LLC need its own bank account?
Yes. Rents and expenses should run through the LLC’s own account. Mixing personal and LLC money can weaken the liability protection the LLC gives you.
Can a privacy LLC buy property?
Yes. The deed is recorded in the LLC’s name. The escrow, lender and title company will verify who controls the LLC using your Operating Agreement and minutes, which stay private.
Last reviewed October 18, 2026 against California Secretary of State and Franchise Tax Board sources. This page is general information, not legal or tax advice.