Can I buy a house in my LLC's name in Texas?

• An LLC (limited liability company) can buy a house in Texas.
• Many loans for a home you live in are made to people, not companies. For an LLC, you're usually looking at a different kind of loan with different rules. Your lender confirms what applies.
• The general Texas homestead exemption requires that an individual have an ownership interest in the home and live there as a principal residence. If the LLC holds title, ask the appraisal district and your attorney whether your situation qualifies.
• The protection many owners want from an LLC depends on how it's formed and run. Your attorney confirms that.
• The tax effect is confirmed by your tax preparer, before you sign.

An LLC is a company you form with the Texas Secretary of State by filing a certificate of formation. Plenty of business owners already have one for their work: a medical practice, a consulting firm, a shop, a services company.

So the question comes up on its own: "If my money is in the company, why not buy the house in the company's name?" Sometimes the goal is protection, sometimes it's taxes, and sometimes it's simply that the down payment sits in the business account.

Those are fair questions. The catch is that buying in an LLC's name isn't the same as buying in yours, and the differences show up in the loan, the tax bill and the closing paperwork. Better to know them early.

One more thing: whose name goes on the deed isn't only a legal question. It's practical too. It changes who signs, which account pays, whose name is on the tax bill and what happens if you sell one day. That's why it's decided at the start.

1. The loan. Many owner-occupied home loans are designed for individuals. If the LLC is the buyer, the lender may offer a different kind of loan, with its own rules, paperwork and costs, which it gives you in writing. Some lenders ask you to sign a personal guarantee. Ask all of that before you tour homes.
2. The homestead exemption. In Texas, the general homestead exemption lowers the taxable value of the home you live in. The Comptroller explains that an individual must have an ownership interest in the property and use it as a principal residence. If the LLC owns it, ask your county appraisal district and your attorney how your situation looks.
3. Insurance. The policy has to be in the owner's name. Get the quote in the LLC's name before you offer.
4. Closing paperwork. The title company will ask for the LLC's documents: the certificate of formation, who's authorized to sign, and sometimes a resolution from the members. Missing pieces delay closing.
5. Your business taxes. Holding the home inside the LLC can change how things are reported. Your tax preparer tells you what it means for you.

If you'd like to review your situation before you decide whose name goes on the deed, book 30 minutes here.

It can make sense when the property is part of the business: say, land with a shop where the company works, or a property your attorney and tax preparer recommend keeping separate.

It often makes less sense for the home you and your family will live in. There, the homestead exemption, loans built for owner-occupants and simpler paperwork tend to weigh more. Many business owners buy the home in their own names and use business funds for the down payment, with clean documentation. More on that in using business funds for a down payment in Texas.

In the cases Veronica Yeary handles around Dallas-Fort Worth, this question gets answered before the first showing.

There's no one answer for everyone. There's an answer for your situation, and it comes from a conversation with your attorney, your tax preparer and your lender.

A good way to start that conversation is with three plain questions. Who will live in the home? Will the business use any part of it? And if you sold it someday, whose money would the proceeds be? The answers usually point the way before anyone opens a legal file.

1. Deciding at closing. Switching whose name you're buying in after you're under contract can change the loan and push everything back.
2. Assuming an LLC protects everything, always. That's what people used to say; today it's understood that it depends on how the company is formed and run. Your attorney explains it.
3. Forgetting the homestead exemption. On the home you live in, not having it can change the tax bill. Ask first.
4. Using an LLC with incomplete paperwork. If the filing isn't current or it's unclear who signs, the title company will stop.
5. Buying in the LLC and later deeding it to yourself "to fix it." Every transfer has its own paperwork and effects. Better to decide once, and decide well.
6. Mixing the business and the house in one account. Paying the mortgage, the insurance and the repairs from whichever account has money that week blurs the line your attorney is trying to draw. Decide which account pays for the house, and keep it that way.

Picture an engineer who owns a consulting firm in Denton County. She wants a home with land where her family can live and she can have a separate office. Her first idea is to buy everything in her LLC's name, since that's where the money is.

Before touring anything, she talks through her situation with her agent. Her lender explains which loans are available in her name and which in the LLC's. Her tax preparer explains the tax effect. Her attorney reviews whether anything should be kept separate. With that, she decides whose name to buy in, uses business funds for the down payment with the paperwork in order, and starts looking knowing exactly how it will close.

This is an example to explain the process, not a real client or a promised result.

• What the home is for: to live in, for the business, or both.
• Your LLC filing with the Secretary of State, current, and who can sign.
• Which loans your lender offers in your name and in the LLC's, with costs in writing.
• The homestead exemption: what your county appraisal district says.
• The insurance quote in the future owner's name.
• The tax effect, with your tax preparer.
• The protection you're after, with your attorney.

You may also find these useful: what to sort out before selling if you own a business and why the tax bill on the listing won't be yours.

Can an LLC buy a house in Texas?

Yes. What changes is the loan type, the closing paperwork, the insurance and the taxes. Your lender, tax preparer and attorney confirm how it applies to you.

Can I get a homestead exemption if my LLC owns the house?

For the general homestead exemption, the Texas Comptroller requires that an individual have an ownership interest in the home and live there as a principal residence. Ask your county appraisal district and your attorney how your situation looks.

Will a lender finance a purchase in an LLC name?

Some will, often with a different kind of loan and different rules. Some ask for your personal guarantee. The lender gives you the terms in writing.

What will the title company ask for if my LLC buys?

Usually the certificate of formation and proof of who's authorized to sign for the LLC, and sometimes a resolution from the members. Have them ready before you make an offer.

Should I buy the home I live in through my business?

It depends on your situation. Many families buy the home they live in under their own names and use business funds for the down payment with clean paperwork. Your attorney and tax preparer confirm what makes sense for you.

You built your business carefully. The house gets bought the same way: deciding whose name, which loan and which paperwork before you offer.

Here's what happens next: we talk for 30 minutes about your business and the home you're after, and that tells us what to ask each of your advisors.

Let's talk for 30 minutes about your situation, not houses: veronicayeary.com/en/book

Call or text 469-441-8890 · veronica@veronicayeary.com