[IL] How do I transfer my house to my LLC?
I'm filing a quitclaim deed to transfer my house that we were recently living in to my LLC in preparation to rent it out as an investment property. I’m not sure how to answer this question: “The property is or is not registered as the homestead of the Grantor(s), hereby releasing and waiving all rights under and by virtue of the Homestead Exemption Laws of the State of Illinois.”
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Based on what you’ve shared, it sounds like the property you’re transferring to your LLC was your homestead, and you’ve been claiming the homestead exemption for it (735 ILCS 5/12-901).
Since you’ve recently bought a new home and plan to rent out the old one, you’ll need to release and waive the homestead rights on the property you’re transferring (735 ILCS 5/12-904). The exemption only applies to your primary residence, and now that you’re moving, you can’t continue to claim it on the old property.
When answering the question on the quitclaim deed, check the box stating the property “is” registered as your homestead and release the exemption rights. This is standard when the homestead status is changing.
Keep in mind, by transferring the property to your LLC, you’re also giving up protections associated with the homestead exemption (like some protections from creditors). But that’s normal for rental properties under LLCs.
Let me know if you need any more clarification!
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I'm filing a quitclaim deed to transfer my house that we were recently living in to my LLC in preparation to rent it out as an investment property. I’m not sure how to answer this question: “The property is or is not registered as the homestead of the Grantor(s), hereby releasing and waiving all rights under and by virtue of the Homestead Exemption Laws of the State of Illinois.”
Lexi, Chatbot
I understand you're transferring your house to your LLC for rental purposes. Are you familiar with the homestead exemption laws in the State of Illinois?
Yes.
Lexi, Chatbot
Have you previously claimed the property as your homestead under the Homestead Exemption Laws of Illinois?
Yes.
Lexi, Chatbot
Is there anything else the lawyer should know before I connect you?
No.
TJ, Esq.
Hello! My name is TJ, and I’m an attorney. Thanks so much for the opportunity to assist you!
Since you’ve already claimed the property as your homestead, you should indicate that the property “is” registered as the homestead of the Grantor(s). By doing so, you’re acknowledging that the property was previously eligible for the Homestead Exemption.
By transferring it to your LLC, you’re waiving those homestead rights, which is likely why the form is asking you to release and waive any rights under the exemption laws.
Have you already filed for the homestead exemption for this year, or are you in the process of doing so? Also, are you planning to continue living in the property after transferring it to your LLC, or will it be an entirely rental property?
I think yes, I have already filed for the homestead exemption for this year because I haven’t changed anything and that’s been the default for the last 15 years we’ve been living there. Just last week, we bought a new house and I’m starting the process of transferring the old one to my LLC and getting it ready to rent out.
TJ, Esq.
Based on what you’ve shared, it sounds like the property you’re transferring to your LLC was your homestead, and you’ve been claiming the homestead exemption for it (735 ILCS 5/12-901).
Since you’ve recently bought a new home and plan to rent out the old one, you’ll need to release and waive the homestead rights on the property you’re transferring (735 ILCS 5/12-904). The exemption only applies to your primary residence, and now that you’re moving, you can’t continue to claim it on the old property.
When answering the question on the quitclaim deed, check the box stating the property “is” registered as your homestead and release the exemption rights. This is standard when the homestead status is changing.
Keep in mind, by transferring the property to your LLC, you’re also giving up protections associated with the homestead exemption (like some protections from creditors). But that’s normal for rental properties under LLCs.
Let me know if you need any more clarification!
Okay, I’m confused about the timing of giving up the homestead exemption. Since we moved last week, should I contact the tax department and start this now?
TJ, Esq.
I can see why this would be confusing—glad you asked! Since you moved out last week, your primary residence has changed, which means you no longer qualify for the homestead exemption on that property.
It’s a good idea to contact the tax department now and inform them of the move so they can update their records. This ensures the exemption is properly removed for the next tax cycle.
Even if the LLC transfer isn’t complete yet, it’s better to notify the tax department sooner rather than later, to keep everything aligned with your current living situation.
Hope that clears things up!
Got it, thank you!
TJ, Esq.
You're very welcome! I'm happy I could help!
TJ, Esq.
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