Feb62026
Real Estate Q&A Series

Are there tax or transfer-fee consequences when deeding property from an individual to an LLC? – North Carolina

Short Answer

In North Carolina, deeding real property from an individual to an LLC can trigger the state excise tax on conveyances (often called a “transfer tax”) when the deed is recorded, depending on the consideration or value reported for the transfer. Even when the transfer is intended as an “internal” move (for example, the same owner controls the LLC), the Register of Deeds typically requires an excise-tax determination before recording. Separate from recording taxes and fees, the transfer can also have income-tax and mortgage-related consequences, so it is wise to coordinate with a North Carolina real estate attorney and a CPA.

Understanding the Problem

In North Carolina real estate practice, the question is whether moving title from an individual owner to an LLC by quitclaim deed creates taxes or transfer-related fees at the time the deed is recorded. The key decision point is how North Carolina treats the transfer for recording purposes: whether the deed is a conveyance that requires payment of a transfer-related tax based on consideration or value, or whether the transfer fits an exemption. The practical focus is what must be paid and reported to the county Register of Deeds to get the deed recorded in the LLC’s name.

Apply the Law

North Carolina imposes an excise tax on instruments that convey an interest in real property to another person, and the tax is generally calculated from the consideration or value reported for the conveyance. The transferor pays the excise tax to the county Register of Deeds before the deed can be recorded, and the person presenting the deed must report the correct tax due. Whether a deed from an individual to an LLC is taxable often turns on what consideration (including assumed debt) is involved and whether a statutory exemption applies.

Key Requirements

  • A conveyance to “another person”: Recording a deed into an LLC is typically treated as conveying an interest in real property from the individual to a separate legal person (the LLC), even if ownership control overlaps.
  • Consideration or value reported: The excise tax is generally based on the consideration paid or the value of the interest conveyed, as reported when the deed is presented for recording.
  • Excise-tax reporting and payment before recording: The Register of Deeds collects the excise tax (if due) and marks the deed to show the tax paid and the amount before recording.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the plan is to transfer North Carolina real property from an individual name into an LLC using a quitclaim deed. Because an LLC is a separate legal person, recording the deed commonly triggers the need to determine whether North Carolina excise tax applies under the consideration-or-value rule. If the deed is treated as having consideration (including the LLC taking the property subject to debt or the LLC providing value in exchange), the Register of Deeds will typically require excise tax to be paid based on the reported amount. If the transfer is structured to fit an exemption (for example, a true gift or a transfer where no consideration is due or paid), the excise tax may not apply, but the deed still must be presented and properly reported for recording.

Process & Timing

  1. Who files: The person presenting the deed for recording (often the owner or a closing attorney). Where: The Register of Deeds in the county where the property is located. What: A properly drafted and executed deed (a quitclaim deed is one common option) that identifies the grantor (individual) and grantee (LLC) and includes the information the Register of Deeds requires for excise-tax reporting. When: Before the deed can be recorded, any excise tax due must be paid and the amount due must be reported.
  2. Excise tax determination at recording: The presenter reports the excise tax due, and the Register of Deeds collects it (if any) and marks the deed to reflect payment and the amount.
  3. Recording and follow-through: Once recorded, the public record reflects the LLC as the owner. After recording, it is common to update insurance, leases, and property-tax mailing information to match the LLC ownership and management plan.

Exceptions & Pitfalls

  • “No consideration” and “gift” issues: North Carolina provides excise-tax exemptions for certain transfers, including gifts and transfers where no consideration is due or paid, but the facts and paperwork matter. A deed that says “$1 and other valuable consideration” can create questions about whether consideration exists for excise-tax purposes.
  • Debt can function like consideration: If the property has a mortgage or other liens, moving title into an LLC can be treated as involving value/consideration depending on how the transfer is structured and what obligations the LLC takes on. This is also where loan documents can create separate problems. (For more on that issue, see what happens if the property has a mortgage and it is deeded into an LLC.)
  • County recording requirements: Some counties can require a delinquent-tax certification before accepting a deed for recording, unless the deed is submitted under attorney supervision with the required statement. This can delay recording if delinquent taxes exist or if the deed package is incomplete.
  • Income-tax consequences are separate: The North Carolina excise tax is a recording/transfer tax. Federal and state income-tax consequences (including basis and gain recognition) depend on how the transfer is treated for tax purposes and whether the LLC is disregarded, taxed as a partnership, or taxed as a corporation. A CPA or tax attorney should review the plan before recording.
  • Quitclaim deed limits: A quitclaim deed transfers whatever interest the grantor has, without warranties. That can be fine for internal transfers, but it does not fix title problems and may not satisfy every lender or insurer’s preferences. (For the mechanics of the transfer, see transfer a property from a personal name to an LLC using a quitclaim deed.)

Conclusion

In North Carolina, deeding property from an individual to an LLC can create transfer-related costs at recording, especially the state excise tax that is generally calculated at $1 per $500 of the consideration or value reported for the conveyance. Some transfers may be exempt (such as certain gifts or transfers with no consideration due or paid), but the deed language and the real-world facts control. The next step is to have the deed prepared and then record it with the county Register of Deeds while correctly reporting (and paying, if required) the excise tax at recording.

Talk to a Real Estate Attorney

If you’re dealing with transferring a North Carolina property from an individual name into an LLC and want to avoid recording delays and surprise transfer costs, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.

Category: Real Estate Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.