3 Benefits of Buying an NYC Home as an LLC

Written By Teresa Alessandro | June 10, 2019 | Published in Real Estate Market Trends, Elegran Insider
2019%2f05%2f23%2f17%2f06%2f21%2fa188850f f268 4e20 ad59 0a0c0dfd9c69%2f3%20benefits%20of%20buying%20an%20nyc%20home%20as%20an%20llc

LLCs, or hybrid companies that can protect owners from legal issues and help with tax abatements, are a popular strategy that many homeowners take when buying in NYC. LLC buyers can easily go through the purchasing process with condos in particular. Steven Wagner, co-op and condo attorney at Wagner Berkow LLP, stated that “unlike a co-op, a condo can't say yes or no to your purchase, all they can do is exercise the board's right of first refusal, which very few buildings do.” A condo's right of first refusal essentially tells the purchaser that the condo has no need to directly purchase the unit being transferred, and therefore you as a buyer can proceed with your transaction and become an owner in the building.

According to Ross Levine of Schwartz Levine PLLC, “There are tax implications associated with any choice and typically if the parents are buying for their adult children, we usually recommend creating an LLC in NYS which is owned by a newly formed Trust. This would protect the asset in the time of an Estate proceeding and will avoid any issues with a buyer being a foreign person.” Creating a corporation or specifically an LLC to then purchase an apartment in NYC allows for 3 main benefits:

1. Ownership Structure Makes You Less Liable

One benefit is that the LLC can deflect any risk of liability from being sued personally. The LLC corporate shield protects owners so that if the property in question were owned by an LLC, the owner’s risk exposure would be insulated by the protection of the company, leaving only the assets owned by the LLC (as opposed to all of the owner’s personal assets) exposed to potential lawsuits. In other words, personal finances would not be in jeopardy.

There are legal protections to holding a property as an isolated company rather than in your name or your company’s name, in the event that in the future you opt to rent out the unit. In addition to your homeowners insurance policy, having the property owned in an LLC can protect you as a landlord if your tenant should ever sue you.

2. Transfer of Property

The way an LLC is structured allows the person managing it to easily transfer their ownership. Those who own a real estate company are able to “gift” it to heirs without having to sign a deed. The process of gifting can even be preferable, as gives owners the ability to avoid certain taxes.

3. Single Taxation

The LLC can basically become what’s called a pass-through entity for profits, avoiding the possibility of proceeds being taxed once as company income and again as individual income of the partners. Speaking with your New York or U.S. Accountant and Financial Advisor is always recommended. 

Blog Archive


This information is not verified for authenticity or accuracy and is not guaranteed and may not reflect all real estate activity in the market. © 2021 REBNY Listing Service, Inc. All rights reserved. RLS IDX Data display by Elegran LLC. IDX information is provided exclusively for consumers’ personal, non- commercial use and that it may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.

Elegran LLC may or may not be the exclusive listing agent of the properties being displayed on Elegran.com. All data displayed on Elegran.com is presented for informational purposes only and should be independently confirmed by all customers. All Information is compiled from both public and private sources including, but not limited to the RLS, MLS and ACRIS; each of which is assumed to be reliable. All information displayed is subject to errors and omissions regarding apartment specifications and final sale prices, and further, any unit listed may have had its listing withdrawn without notice subsequent to such information being compiled. No representation is made as to the accuracy of any description (ie: listing, close sale data, and/or building description) of any building or individual unit. All measurements and square footage are approximate and all information herein should be confirmed by customer and/or their attorney. Elegran LLC, its members, affiliates, and contributors adhere to New Your City, New York State, and United States Fair Housing Laws.