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Rental property LLCs in Pennsylvania

Yes, you can hold a Pennsylvania rental in an LLC. You file a Certificate of Organization with the Department of State for $125, then an annual report ($7) between January 1 and September 30 every year, starting the year after you form. Rental licensing is city by city: Philadelphia, Allentown, Erie and Scranton each require owners to license or register rentals, and Pittsburgh's registry is voluntary for now. Forming the LLC doesn't move your deed, and a deed from you to your own LLC is a taxable transfer under the state's 1 percent realty transfer tax, plus any local tax, unless an exclusion applies.

Last checked 2026-10-24. General information, not legal or tax advice.

Local rental rules come first

Philadelphia. A landlord needs a Rental License from the Department of Licenses and Inspections for each building. The fee is $69 per unit (nothing for owner-occupied units), the license renews every year, and renewing more than 60 days late costs 1.5% of the fee for each month since it expired. Rental Licenses "are not transferrable," so a deed to your LLC means closing the old license and applying for a new one (city Get a Rental License page). If you don't occupy the property, or the building has four or more rental units, you also need a Commercial Activity License and pay the city's Business Income & Receipts Tax. The Commercial Activity License is free and must name the legal entity exactly as registered with its Philadelphia tax account; for company-owned property you give the name and mailing address of each person with more than 49% of the ownership, or of the two largest owners. An owner outside Philadelphia must name a managing agent with a Philadelphia mailing address, and a building constructed before March 1978 needs a lead-safe or lead-free certification. You must also give each tenant a Certificate of Rental Suitability before move-in, and a new one for each new tenant or renewed lease (city Rental License, Commercial Activity License and Certificate of Rental Suitability pages).

Philadelphia short-term rentals. The Limited Lodging Operator License covers renting "your primary residence or a room in it for 30 consecutive days or less," and "Only an owner or tenant living in the property as their primary residence is eligible." It costs $150 (the $20 non-refundable application fee counts toward it), needs a limited lodging Zoning Permit and a virtual inspection, and renews every year. A property with no primary resident is a "visitor accommodation use" instead: it needs its own Zoning Permit and a Rental License with a hotel designation. The city's Hotel Tax is 8.5% of the amount received, due on the 15th of each month for the previous month's rentals (city Limited Lodging, short-term rental and Department of Revenue pages).

Pittsburgh. The Department of Permits, Licenses and Inspections (PLI) runs a Residential Housing Rental Permit Program, but it says rental registry compliance "remains voluntary until further notice," that it does not enforce the program or seek penalties for now, and that it will publish revised rules at least 30 days before full enforcement begins. The fees are $16.00 per unit to register, plus inspection fees of $5.50 per rental unit and $14.00 per dwelling or sleeping unit (PLI Registrations page, last updated 09/29/2026). The program rules define the owner as "the legal title holder" of the rental unit, so an LLC that holds title is the owner, and they treat short-term homestays as rental units (PLI Rules and Regulations dated 12/19/24).

Allentown, Erie and Scranton. Allentown says that if you rent out a house or apartment you "must register it with the city by law," pass an inspection, and hold a rental license that renews each calendar year at $75 per unit; an owner who lives outside Lehigh County must designate an agent who lives or works in the county (city Rental Unit Registration & Inspection page and registration form). Erie requires every non-owner-occupied unit to be registered each year at $40 per unit and inspected once every two years, and the new owner of a sold or transferred unit has 60 days to register it (city Residential Rental Registration page). Scranton makes a Rental License mandatory, with renewals due March 15 each year, $45 per unit for one to three units and flat fees for larger buildings, a local representative named on the application, and inspections on a three-year cycle (city Rental Licensing page).

Elsewhere in Pennsylvania. The Department of State's business bureau doesn't issue licenses for specific business activities, and it tells businesses to contact their county, township, city or borough about local licensing (Department of State FAQ). Ask your municipality before the first lease, and see the hotel tax below if you rent short-term.

What the LLC protects, and what it doesn't

Pennsylvania's LLC law says: "A member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation or other liability of the company solely by reason of being or acting as a member or manager" (15 Pa.C.S. § 8834(a)). That applies whether the company has one member or several.

  • Guarantees still bind you. A personal guarantee you sign for a lender is your own promise.
  • Your own acts are yours. The protection covers liability that comes solely from being or acting as a member or manager; ask a Pennsylvania attorney about your own negligence.
  • It isn't insurance. The LLC still needs coverage that pays claims and defense costs.

One LLC, or one per property?

Separate LLCs keep one property's judgment away from the others, at $125 plus a registered office each, and a $7 annual report every year for every LLC. Pennsylvania has no series-LLC option that I could find: its LLC chapter (15 Pa.C.S. ch. 88) has no series provision, and the word "series" appears there only in the benefit-company voting rules for a "class or series" of interests. The foreign-registration law does assume an out-of-state association may have series: it must say so in its registration statement (§ 412(a)(6)), and its home state's law governs the liability of a series (§ 402(a)(3)). Whether an out-of-state series would protect Pennsylvania property is a question for a Pennsylvania attorney. More: Should you have a separate LLC for each rental property?. Other states: Indiana · Tennessee · South Carolina · all state guides.

Form it where the property is, or register there

The simplest setup is a Pennsylvania LLC for Pennsylvania property. An LLC formed in another state registers by filing a foreign registration statement with a docketing statement ($250) and must keep a registered office in Pennsylvania (15 Pa.C.S. §§ 411(f), 412; Department of State fee schedule and FAQ). The law's list of activities that don't count as doing business includes "Acquiring, owning, holding, leasing as a lessee, conveying and transferring, without more" real estate (§ 403(a)(12)). Leasing as a lessor isn't on that list, and the list doesn't limit how other laws treat service of process, taxation or regulation (§ 403(c)), so ask a Pennsylvania attorney before you rely on it for a property you rent out. An unregistered foreign LLC doing business here "may not maintain an action or proceeding in this Commonwealth" until it registers, which could matter if you ever sue a tenant, but skipping registration doesn't impair its contracts or acts and doesn't waive its members' liability limits (§ 411(b)–(d)). A registered foreign LLC files the same annual report (Department of State). Philadelphia separately asks for a Commercial Activity License from businesses "located outside the city limits that do business in the city" (city Commercial Activity License page).

What it costs the state

  • Certificate of Organization: $125 (15 Pa.C.S. § 153(a)(3)(i); Department of State fee schedule)
  • Annual report: $7 a year per LLC, filed January 1 to September 30 beginning the year after formation; $0 for an LLC with a not-for-profit purpose (§§ 146(c), 153(a)(18); Department of State Annual Reports page)
  • Name reservation (optional): $70, holds the name for 120 days (§§ 153(a)(13), 208(a))
  • Expedited service (optional): $100 same-day, $300 three-hour or $1,000 one-hour, added to the filing fee; standard processing is about 15 business days (§ 153(a)(15); Department of State)
  • Reinstatement after administrative dissolution: $35 filed electronically ($40 otherwise), plus $15 for each unpaid annual report (§ 153(a)(19))
  • Foreign LLC registration: $250 (§ 153(a)(2)(i))
  • Franchise tax: none; the capital stock and foreign franchise tax ended for tax years beginning January 1, 2016 (Department of Revenue)
  • EIN: free from the IRS

Compare services: LLC services compared.

Forming the LLC, in order

  1. Pick a name that contains "company," "limited" or "limited liability company," or an abbreviation of one of those terms (§ 204(c)), and that is distinguishable on the Department of State's records (§ 202(b)). Reserve it first if you want to hold it.
  2. Choose a registered office: a street address in Pennsylvania (no P.O. boxes), or the name of a commercial registered office provider (15 Pa.C.S. §§ 8821(b), 8825(a), (c); Department of State). Pennsylvania uses a registered office rather than a registered agent.
  3. File the Certificate of Organization (DSCB:15-8821) with a docketing statement (DSCB:15-134A) at the Bureau of Corporations and Charitable Organizations ($125). The LLC exists when the certificate becomes effective (§ 8821(f)). Allow about 15 business days; no advertising is required for a domestic LLC (Department of State).
  4. Write an operating agreement. The act lets one be oral or implied (§ 8812), but you want it on paper.
  5. Get an EIN and open the LLC's bank account.
  6. Calendar the annual report: the first one is due the year after you form.
  7. Get the city rental license or registration in the LLC's name (above).

Forming the LLC doesn't move your deed

Putting your rental in the LLC takes a new deed, recorded with the county recorder of deeds, which also collects the state and local realty transfer tax (Department of Revenue Realty Transfer Tax page). If the deed is recorded, the grantee's separate duty to register it with the county chief assessor within 30 days doesn't apply (53 Pa.C.S. § 8862.1).

  • A deed to your own LLC is taxable. The state tax is "1 percent on the value of real estate" transferred by deed, and "Both grantor and grantee are held jointly and severally liable" (Department of Revenue). Documents that transfer title between associations or corporations and their members "are fully taxable," and for this tax they are "entities separate from their members" (Tax Reform Code of 1971 § 1102-C.4, 72 P.S. § 8102-C.4). For taxes other than income taxes an LLC is "deemed to be a corporation" (15 Pa.C.S. § 8835(a)). The Department's regulation says the same about transfers between entities and their members (61 Pa. Code § 91.154(a)).
  • Exclusions are narrow. The Department's list covers transfers between close family members and from an entity to a member who has held the interest for more than two years, among others (61 Pa. Code § 91.193(b)(6), (13)). I found nothing for a deed from an owner to the owner's own rental LLC, so ask the recorder or an attorney before you claim one. A claimed exclusion goes on the statement of value with the true, full value (§ 91.194).
  • Local tax comes on top, and rates vary. Philadelphia lists "3.578% (City) + 1% (Commonwealth) = 4.578% (total)," effective July 1, 2025. Allegheny County lists a 5% total for Pittsburgh: 1% state, 3% city and 1% school district.
  • No price on the deed? The tax uses assessed value. For a transaction without consideration the statute measures "actual monetary worth" by adjusting the assessed value by the common level ratio (§ 1101-C, "Value"); Philadelphia calls this the "computed value."
  • File a statement of value. It goes in duplicate with the deed, signed by a responsible person connected with the transaction, unless the deed states the full value and claims no exclusion (61 Pa. Code § 91.112(a), (b)).
  • Selling LLC interests can trigger the tax again. A "real estate company" is a corporation or association primarily holding, selling or leasing real estate, with 90% or more of its ownership held by 35 or fewer persons, that earns 60% or more of its gross receipts from real estate or holds real estate worth 90% or more of its tangible assets (§ 1101-C). If changes in ownership transfer 90% or more of it within three years, it becomes an "acquired company" and owes the tax, with a declaration of acquisition filed with the recorder within 30 days (§ 1102-C.5); transfers between family members don't count as changes (61 Pa. Code § 91.202(c)). Philadelphia's page lists transfers of 75% or more of a real estate company as taxable.
  • Recorders set their own paperwork. Allegheny County requires a Certificate of Residence with each deed, or the same information in the deed, and "Deeds will be rejected that do not have valid mailing addresses"; its standard recording fee is $200.00 as of January 1, 2026, and the transfer tax is collected when the deed is recorded. In Philadelphia the recording office is the Department of Records. Check your county's schedule.
  • If you live in the home, check the homestead exclusion first. Pennsylvania's homestead definition is a dwelling "primarily used as the domicile of an owner who is a natural person" (53 Pa.C.S. § 8401), and Philadelphia says "Businesses and other legal entities do not qualify" for its Homestead Exemption. An LLC isn't a natural person, so ask your county assessment office before you deed a home you live in.

Have a Pennsylvania attorney prepare the deed and the statement of value. After it records, update leases, rent payment instructions, deposits and insurance, and apply for city licenses in the LLC's name.

Check the mortgage before you transfer

Federal law lets a lender enforce a due-on-sale clause, and a transfer to an LLC isn't one of the exceptions for 1–4 unit homes (12 U.S.C. § 1701j-3(d)). Fannie Mae allows a transfer to an LLC the borrower controls for loans it acquired on or after June 1, 2016 (Fannie Mae Servicing Guide D1-4.1-02). Ask your servicer in writing.

Insurance and taxes

Tell your insurer before title moves. For federal income tax, a single-member LLC is disregarded unless it elects corporate treatment (IRS).

  • Personal income tax. For Pennsylvania personal income tax, a single-member LLC owned by an individual is a disregarded entity: its rental income goes on the owner's PA-40 Schedule E (Schedule C for short-term lodging), and the LLC files no PA-20S/PA-65 (Department of Revenue PIT guide and Home-sharing page). The rate is 3.07 percent (Department of Revenue Tax Rates).
  • Corporate taxes. "Any entity classified as a corporation for federal income tax purposes is considered a corporation in Pennsylvania," and single-member LLCs and multi-member LLCs taxed as partnerships or S corporations are not subject to the corporate net income tax (Department of Revenue).
  • Short-term rentals owe hotel occupancy tax. Renting lodging for less than 30 days to the same person means collecting and remitting 6 percent, plus 1 percent local tax in Allegheny and Philadelphia counties. If you book exclusively through a platform that confirms it collects and remits the tax, you shouldn't register; otherwise register for a Sales, Use, and Hotel Occupancy Tax License through myPATH (Department of Revenue Home-sharing page).
  • Philadelphia business taxes. For 2026 rental activity the Business Income & Receipts Tax is 1.410 mills on gross receipts and 5.71% on net income, filed by April 15 for the previous year (city Department of Revenue).

Keeping each LLC in good standing

  • File the annual report ($7) online at file.dos.pa.gov between January 1 and September 30 each year, starting the year after you form. The Department mails a postcard notice to the registered office at least two months before the deadline, but a missed notice doesn't excuse a missed report (§ 146(g); Department of State).
  • Missing it can end the LLC's good standing. Beginning with reports due in 2027, if an LLC hasn't filed within six months after the due date, the Department may start administrative dissolution (§ 381); the LLC gets notice and 60 days to file (§ 382(b)). A dissolved LLC "may not carry on any activities except as necessary to wind up" or apply for reinstatement (§ 382(d)), and it loses the exclusive right to its name (Department of State). Reinstatement relates back, and activities in between are valid as if dissolution never occurred (§ 383(c)).
  • Keep the registered office current (§ 8825(a)); change it in an annual report or with a certificate of change (§ 8825(b)). The Department sends notices there.
  • Renew city licenses on their own clocks: Philadelphia every year, Allentown each calendar year (bill by December 31), Erie every year, Scranton by March 15. File Philadelphia's hotel tax by the 15th of each month.
  • Watch ownership changes: selling most of the LLC can make it an "acquired company" (above).

Before you file or transfer a property

  • Attorney: the deed, the statement of value, any transfer-tax exclusion, separate LLCs
  • Servicer: is the transfer allowed?
  • Insurance agent: named insured, coverage
  • Recorder and assessor: recording requirements, homestead status
  • CPA: income tax, hotel tax, Philadelphia business taxes
  • City: rental license or registration in the LLC's name
  • Calendar: September 30 annual report; city renewals; hotel tax returns

Form it with Corpus

Corpus prepares and files your Certificate of Organization and includes the first year of registered-agent service. The Pennsylvania page shows the current price. Corpus isn't a law firm: the deed, the loan, taxes and city licenses are separate steps.

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Sources

Last checked 2026-10-24. Corpus is not a law firm and does not provide legal or tax advice.