A deed from you into your own single-member LLC can be exempt from Maryland recordation tax under Tax-Property 12-108(y) when it converts a sole proprietorship, which includes an individual holding title in their own name, into an LLC whose sole member is that same person.
Investors who bought a rental in their own name often move it into an LLC before a DSCR refinance. Maryland has specific exemptions for that move, and each comes with conditions. For the Maryland rules that apply statewide, see DSCR loans in Maryland.
Is a deed into my own LLC exempt from recordation tax?
It can be under 12-108(y) when an individual converts to an LLC whose sole member is that same individual, with identical profit and loss allocation and the deed representing the conversion, or under 12-108(bb) when all of an owner's real estate enterprise property moves into a single LLC with identical owners.
- Section 12-108(y)(1)(iv) says a sole proprietorship includes an individual who owns an interest in real property in the individual's name.
- Frederick County's Treasury Department announced that, effective November 1, 2014, an affidavit completed by the individuals in the real estate enterprise must accompany any deed recorded under the (bb) exemption.
Exception: The (bb) route requires all enterprise property to go to one LLC, so splitting rentals across several LLCs fails it, and adding a member who wasn't on title fails the identical-owner test in both (y) and (bb).
According to Md. Code, Tax-Property 12-108, Maryland General Assembly, and Frederick County's LLC affidavit letter, as of October 2026.
Does the same deed avoid Maryland's state transfer tax?
The state transfer tax is 0.5% of consideration under 13-203, and 13-207(a)(18) exempts from it any deed exempt from recordation tax under 12-108(y) or (bb); 2017's HB 363 added sole proprietorships to (y), which carried them into that exemption.
- For recordation tax, 12-103(a)(2) counts any mortgage or deed of trust assumed by the grantee as part of the consideration.
Exception: County transfer taxes are set by county law, so confirm with the title company whether your county exempts the same deed before recording.
According to Md. Code, Tax-Property 13-203, 13-207 and 12-103, and 2017 House Bill 363, Maryland General Assembly, as of October 2026.
Is selling an interest in my LLC taxed like a deed?
Yes when more than 80% of a real property entity changes hands: recordation and transfer taxes apply as if the real estate were deeded, the entity's debts count as consideration less any value allocable to assets other than real property, and the report and tax are due within 30 days.
| Example: 100% of an LLC sold, Cecil County | Amount |
|---|---|
| Cash paid for the membership interests | $400,000 |
| Mortgages on the LLC's rentals | $800,000 |
| Taxable consideration | $1,200,000 |
| State transfer tax at 0.5% | $6,000 |
| Recordation tax at $4.10 per $500 | $9,840 |
Exception: A real property entity is one whose Maryland real property makes up at least 80% of its assets and is worth at least $1,000,000, or an LLC created through an untaxed sole proprietorship conversion under 12-108(y), whatever its value, under Tax-Property 12-117(a)(6). A transfer to another entity owned by the same people in the same proportions is generally exempt, but the report is still required, and 12-117(c) treats LLCs created through a (y) conversion differently.
According to Md. Code, Tax-Property 12-117, the Maryland SDAT controlling interest FAQ and the Cecil County clerk's recording fees page, as of October 2026.
Can I move a rental between my own LLCs without recordation tax?
Only in the structures 12-108(p) lists, such as parent to wholly owned subsidiary or between subsidiaries wholly owned by the same parent, for no or nominal consideration or only ownership interests.
- A subsidiary to parent transfer has holding-period tests, such as the parent owning the subsidiary for more than 18 months.
- Under 12-108(g)(1)(ii), an LLC that received a rental under a deed exempt under (p) or (y) counts as the original mortgagor for the refinance exemption.
Exception: Two LLCs owned directly by the same person, with no parent entity, don't fit the parent and subsidiary language on its face.
According to Md. Code, Tax-Property 12-108(g) and (p), Maryland General Assembly, as of October 2026.
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This page is general education about business-purpose real estate financing and state law as published by official sources on the date shown. It is not legal, tax or lending advice, not an offer to lend and not a rate quote. Laws and lender guidelines change; confirm current rules with the lender, the title company and your own attorney or tax adviser.