You can’t literally sell your house to yourself, because a sale requires two separate parties and one person can’t sit on both sides of the contract. What most people are actually asking is whether they can move their home into an LLC or a trust they control, and the answer there is yes. The reasons to do it, and the traps to avoid, are what the rest of this article is about.
Why a Literal Self-Sale Doesn’t Work
A valid contract needs at least two distinct parties agreeing to terms. No court will enforce a deal where one person is both buyer and seller, so a literal sale to yourself is void.
The law gets around this by treating certain entities as separate legal “persons” even when a single human owns and controls them. An LLC you form is a different legal entity from you. A trust you establish holds property in its own name. A transfer between you and your LLC or trust is a transfer between two recognized parties, not a sale to yourself.
LLC or Trust: Which One Fits Your Goal
The entity you pick should match the problem you’re trying to solve.
LLC for Liability Protection
A single-member LLC is the usual choice when you want liability protection, especially for a rental or investment property. The LLC becomes the legal owner. You stay in control as the sole member and manager, collecting rent and handling the property. If someone sues over an injury on the premises, generally only the LLC’s assets are exposed, not your personal savings or other property.
That shield has limits. Personal guarantees, fraud, and your own direct negligence can still reach you personally. Courts can also disregard the LLC through “piercing the corporate veil” if you treat it as an extension of yourself rather than a real separate business.
Revocable Living Trust for Estate Planning
A revocable living trust solves a different problem: probate. Probate is the court-supervised process of distributing a deceased person’s assets, and it tends to be slow, expensive, and public. Property held in a trust passes directly to your chosen beneficiaries outside of probate.
As the grantor, you typically name yourself as trustee and as a beneficiary during your lifetime, so you keep full control and can change or revoke the trust whenever you want. A successor trustee you designate takes over if you become incapacitated or when you die.
A revocable trust does not shield assets from lawsuits the way an LLC can. Creditors can still reach trust property during your lifetime. If liability protection is the goal, an LLC fits. If probate avoidance is the goal, a trust fits. Some people use both.
The Due-on-Sale Clause: The Biggest Risk
Most mortgages include a due-on-sale clause letting the lender demand full repayment if you transfer ownership without permission. This is the single biggest operational risk in moving your home into an entity.
Federal law treats trusts and LLCs very differently here. Under the Garn-St. Germain Depository Institutions Act, a lender cannot enforce the due-on-sale clause when you transfer property into a trust where you remain a beneficiary and the transfer doesn’t change who actually occupies the property. That protection is written into the statute and overrides contrary language in your mortgage.
LLCs get no such protection. Transfers to an LLC are not among the exempt categories, which means your lender can legally call the loan due the moment you record the deed. Some lenders don’t actively monitor title changes, and some owners take the risk, but “they probably won’t notice” is a gamble with your home. The safer move is to contact your lender first and get written confirmation they won’t accelerate.
Tax Consequences
Federal Income Tax
The IRS treats a single-member LLC that hasn’t elected corporate tax status as a “disregarded entity,” meaning it doesn’t exist for federal income tax purposes. You and your single-member LLC are the same taxpayer, so transferring property to it triggers no federal income tax.
A multi-member LLC is different. Transferring appreciated property to an LLC with other members can be a taxable event, potentially triggering capital gains tax on the appreciation since you bought the home.
The $250,000/$500,000 Capital Gains Exclusion
When you sell a primary residence, IRC Section 121 lets you exclude up to $250,000 in capital gains ($500,000 for married couples filing jointly) if you lived in the home for at least two of the five years before the sale. Transferring to a single-member LLC treated as a disregarded entity doesn’t destroy that exclusion. You’re still treated as owning the residence, and a later sale by the LLC is treated as if you made it yourself. If the LLC has multiple members or has elected corporate taxation, the exclusion is lost.
Transfer Taxes, Recording, and Reassessment
Many states and localities impose a transfer tax when property changes hands, typically ranging from roughly 0.1% to 1.5% of value. Some states exempt transfers where no money changes hands or where proportional ownership stays the same; others tax the transfer regardless. Check your state’s rules before assuming an exemption applies.
Expect recording fees when the new deed is filed (commonly $14 to $154 depending on the county) and a notary fee for the signing (usually $2 to $25 for a single acknowledgment).
Property tax reassessment is a separate concern. Some states reassess value whenever ownership changes, which can sharply increase your annual bill if the home has appreciated. Others, like California, exempt transfers where proportional ownership is unchanged, so a transfer to your own single-member LLC wouldn’t trigger reassessment. This varies enough by state that checking locally is worth the time.
Homestead Exemption and Insurance
If your home benefits from a homestead exemption, transferring title to an LLC can disqualify you. Many states require the owner to be a natural person claiming the home as a principal residence. Once the LLC holds title, you may no longer meet that requirement, and losing the exemption can add hundreds or thousands of dollars to your annual property tax bill. Transfers to a revocable living trust generally don’t cause this problem because the beneficiary is still an individual using the home as a primary residence.
Your homeowner’s insurance policy also matters. Existing policies typically cover you as an individual, not your LLC or trust, and claims may be denied after a transfer because the named insured no longer owns the property. Call your insurer before recording the deed to add the entity as an additional insured, get an endorsement, or write a new policy in the entity’s name.
Refinancing After an LLC Transfer
Holding a home in an LLC creates a real headache if you ever want to refinance or open a home equity line. Most residential lenders won’t underwrite a conventional mortgage on LLC-owned property. They treat it as a commercial loan, which usually means a higher rate, shorter term (often 10 to 15 years instead of 30), and tighter qualification.
The common workaround is to transfer the property back into your personal name, refinance under a conventional 30-year mortgage, and then transfer it back to the LLC. That works, but you may owe recording fees and transfer taxes each direction, and you lose the LLC’s liability shield for the stretch in between. If you expect to refinance, factor that in before you ever file the first deed.
Property held in a revocable living trust generally doesn’t create this problem. Residential lenders are familiar with trust ownership and will typically work with borrowers who hold title that way.
Keeping the LLC’s Protection Intact
Creating an LLC and recording a deed isn’t enough on its own. Courts regularly pierce the veil of LLCs whose owners don’t treat them as genuinely separate. The things that matter:
- Separate finances. The LLC needs its own bank account. Rent, repairs, and property expenses flow through that account, not your personal checking. Mixing funds is the fastest way to lose protection.
- Proper records. Keep the operating agreement, meeting minutes (even informal for a single-member LLC), and financial records current and organized.
- State compliance. Most states require annual reports and fees. Missing these filings can get the LLC administratively dissolved, which strips away its legal existence.
- No treating LLC property as personal. If you use the LLC’s assets as if they were your own, courts will treat you and the LLC as the same.
A written operating agreement matters even for a single-member LLC. It establishes the LLC’s own governance, specifies how distributions work, and restricts transfers of membership interests. Without one, the LLC looks like a formality rather than a real business, which is exactly the argument a plaintiff’s lawyer will make when trying to reach you personally.
How to Actually Make the Transfer
The receiving entity has to exist first. For an LLC, that means articles of organization filed with your state, an EIN from the IRS, and an operating agreement in place. For a trust, the trust document must be executed.
The transfer document is a deed. A quitclaim deed moves whatever ownership interest you have without promising anything about title quality, and because you’re transferring to your own entity and already know the home’s history, a quitclaim is the usual and cheapest choice. A warranty deed guarantees clear title and is standard in arm’s-length sales between strangers, but paying for a title search and giving warranties to yourself is generally unnecessary here.
Prepare the deed naming you as grantor and the entity as grantee. Use the full legal description of the property from your current deed or title insurance policy, not just the street address. Sign and notarize it. Virtually every state requires notarization for real property transfers.
Record the signed, notarized deed with the county recorder’s office where the property sits. Until recording, the transfer isn’t part of the public record and third parties aren’t on notice of the change. After recording, update your homeowner’s insurance, notify your mortgage lender, switch utility accounts into the entity’s name, and make sure the entity’s own records show it holds the property.
If a mortgage exists, talk to your lender before recording. For a trust transfer, Garn-St. Germain protects you from acceleration as long as you remain a beneficiary. For an LLC transfer, written lender consent in advance is what keeps the loan from being called due.