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Manhattan Real Estate Lawyer Peter Zinkovetsky Explains Risks of Buying a Home Through an LLC

09-04-2025 11:00 PM CET | Politics, Law & Society

Press release from: ABNewswire

Manhattan Real Estate Lawyer Peter Zinkovetsky Explains Risks

Peter Zinkovetsky (https://www.avenuelawfirm.com/should-i-buy-my-home-under-an-llc-asset-protection-for-new-york-property-owners/), a Manhattan real estate lawyer at Avenue Law Firm, is highlighting the legal and financial challenges of placing a personal residence in a Limited Liability Company (LLC). In a recent article titled "Should I Buy My Home Under an LLC? Asset Protection for New York Property Owners," Manhattan real estate lawyer Peter Zinkovetsky outlines how LLC ownership, while appealing for asset protection, often introduces complications that can outweigh the benefits.

Manhattan real estate lawyer Peter Zinkovetsky explains that although LLCs offer liability separation and potential protection from personal and property-related risks, the structure is frequently misunderstood by New York homeowners. According to Zinkovetsky, many individuals pursue LLC ownership based on perceived advantages without fully understanding the legal, financial, and tax consequences tied to the decision. At Avenue Law Firm, clients are advised on the full range of implications, particularly those relevant to New York's regulatory landscape.

Avenue Law Firm's Manhattan real estate lawyer Peter Zinkovetsky stresses that placing a home in an LLC is not a straightforward path to asset protection. "The protection afforded by a properly structured and maintained LLC operates in both directions, safeguarding assets against risks that arise inside the company and those that originate from outside the company," states Zinkovetsky in the article. However, in practical terms, New York residents face several major hurdles, including difficulties securing traditional mortgages, forfeiting homeowner tax benefits, and facing ongoing compliance costs that make LLC ownership burdensome.

Traditional mortgage lenders, including those working with FHA, Fannie Mae, and Freddie Mac, typically do not issue residential loans to LLCs. This limitation forces buyers to turn to commercial financing, often with higher interest rates, larger down payments, and personal guarantees that reduce the value of the liability protection. Peter Zinkovetsky explains that these restrictions are particularly impactful in Manhattan, where real estate values are high and financing plays a critical role in ownership decisions.

Manhattan real estate lawyer Peter Zinkovetsky also cautions that transferring a home into an LLC often results in the loss of key tax benefits. The federal capital gains exclusion under Section 121 of the Internal Revenue Code, which allows for up to $500,000 in tax-free profit on the sale of a primary residence for married couples, may not apply to homes owned by a multi-member LLC. In addition, ownership by an LLC may disqualify the property from local tax relief programs such as New York's STAR exemption.

Another major concern raised by Manhattan real estate lawyer Peter Zinkovetsky is the legal risk of courts "piercing the corporate veil." If the LLC is not operated as a truly separate legal entity, courts can remove liability protections and hold owners personally accountable. Zinkovetsky points to common missteps such as commingling funds, failing to maintain formal records, or living in the property without a lease agreement. These actions can blur the line between personal and business use, giving courts reason to disregard the LLC structure.

New York State's legal requirements add more complexity. Establishing an LLC in New York involves filing fees, biennial reporting, and compliance with the state's publication rule, which can cost over $1,200 in Manhattan. Furthermore, real estate transfers into an LLC are subject to both state and city transfer taxes, including New York's 0.4% Real Estate Transfer Tax and New York City's tiered Real Property Transfer Tax.

Privacy is also being diminished as a potential benefit of LLC ownership. The New York LLC Transparency Act, effective January 1, 2026, will require disclosure of beneficial owners' personal information to the Department of State. This eliminates the anonymity that once made LLCs attractive to some property owners in Manhattan.

Peter Zinkovetsky underscores that while LLCs may offer liability protection under the right conditions, the structure demands rigorous adherence to legal formalities. For most primary homeowners in New York, the financial and administrative burdens, combined with the potential legal risks, make this strategy unsuitable. Zinkovetsky advises anyone considering this option to fully evaluate whether the protections are worth the tradeoffs in their specific situation.

The decision to use an LLC for homeownership must be made with full awareness of the consequences. Without proper legal and financial planning, what seems like a protective measure can lead to lost benefits, higher costs, and increased legal exposure. Peter Zinkovetsky continues to guide clients through these decisions with a clear understanding of Manhattan's complex real estate environment.

For New York homeowners navigating decisions about how to structure property ownership, Avenue Law Firm and Manhattan real estate lawyer Peter Zinkovetsky provide detailed assessments tailored to the unique legal and tax context of New York City real estate. Careful planning and compliance with legal requirements are essential to avoid consequences that can undermine the purpose of forming an LLC.

About Avenue Law Firm:

Avenue Law Firm is a Manhattan-based real estate law practice serving local and international clients across residential and commercial transactions. Founded by Peter Zinkovetsky, the firm focuses on delivering clear, results-oriented legal services grounded in New York law.

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Email and website

Email: peter@avenuelawfirm.com

Website: https://avenuelawfirm.com/

Media Contact
Company Name: Avenue Law Firm
Contact Person: Peter Zinkovetsky
Email:Send Email [https://www.abnewswire.com/email_contact_us.php?pr=manhattan-real-estate-lawyer-peter-zinkovetsky-explains-risks-of-buying-a-home-through-an-llc]
Phone: (212) 729-4090
Address:505 Park Ave Suite 202
City: New York
State: New York 10022
Country: United States
Website: https://avenuelawfirm.com/

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