Real Estate Transfer Fee Common Questions - C

Chapter 128 - Receivership Sale

  1. Is the sale from a Chapter 128 (Wis. Stats.) receiver exempt from transfer fee?

  2. If an improper exemption from transfer fee is claimed or the value subject to transfer fee is under reported, is the Chapter 128 receiver liable for a Real Estate Transfer Fee assessment?

Condos (Condominiums, Dockominiums, Garageominiums)

  1. Does a condo declaration amendment that relocates the boundaries between adjoining units require a transfer return?

  2. If a condominium sells its units as "life estates" for $100,000 and at the time of sale, it also signs a "Repurchase Agreement" whereby the condominium will purchase the "life estates" back for 90% of the $100,000. What transfer fees are due and at what values?

  3. A condominium is selling its units as a 75-year lease for $100,000. Is a transfer return and fee due?

Confidentiality

  1. What precautions does the Wisconsin Department of Revenue (DOR) take to ensure the confidentiality of transfer returns when authorized individuals inspect them?

Conversions

  1. What are the filing requirements for mergers or conversions with an effective date of July 1, 2016 or after, under state law (sec. 73.14, Wis. Stats.)?

  2. What are the filing requirements for mergers or conversions with an effective date prior to July 1, 2016, under state law (sec. 73.14, Wis. Stats.)?

Corporations

  1. What is the 3-year requirement for the exemption in state law (sec. 77.25(15), Wis. Stats.), for corporations?

  2. If a corporation deeds its property to the corporation's president for no consideration, will a transfer fee apply?

Corrections (before Register of Deeds records the eRETR)

  1. Can you describe the RETR correction procedure?

  2. If I do not have a document number, how do I file an Amended Real Estate Transfer Return (PE-500x)?

Corrections (after Register of Deeds records the eRETR)

  1. How should I complete a transfer return when a deed is recorded correcting or reforming a previously recorded deed?

  2. How do I correct a transfer return after the Register of Deeds records it?

Correction Instrument/Affidavit of Correction

  1. If I record a Correction Instrument/Affidavit of Correction instead of re-recording a previously recorded deed, do I need to file a transfer return


Chapter 128 - Receivership Sale

  1. Is the sale from a Chapter 128 (Wis. Stats.) receiver exempt from transfer fee?

    If the sale is to a:

    • Mortgage holder of record, then it is exempt from transfer fee. Exemption 14 applies.

    • Third-party with no prior interest in the mortgage, then a transfer fee is due on the sale price. If the sale is nominal, the fee is due on the real estate's fair market value.

  2. If an improper exemption from transfer fee is claimed or the value subject to transfer fee is under reported, is the Chapter 128 receiver liable for a Real Estate Transfer Fee assessment?

    Yes. Under state law (sec. 128.19(1), Wis. Stats.), the "receiver" is vested by operation of law with the title of the debtor. Therefore the receiver is the grantor of the real estate. Under state law (sec. 77.22(1), Wis. Stats.), a transfer fee is imposed upon the grantor of real estate.

Condos (Condominiums, Dockominiums, Garageominiums)

  1. Does a condo declaration amendment that relocates the boundaries between adjoining units require a transfer return?

    Yes. A transfer return is required. A deed and an eRETR must be completed to convey title to real estate. There is no exemption for this conveyance.

  2. If a condominium sells its units as "life estates" for $100,000 and at the time of sale, it also signs a "Repurchase Agreement" whereby the condominium will purchase the "life estates" back for 90% of the $100,000. What transfer fees are due and at what values?

    When recording the life estate, a transfer fee is due on the $100,000. A life estate is a conveyance of real property interest. Additionally, the "repurchase" is subject to fee on the amount paid to buy back the life estate when the instrument terminating the life estate is recorded. The value of the "repurchase" is determined by state law (sec. 77.21(3)(a), Wis. Stats.), as "the amount of the full actual consideration paid therefore or to be paid, including the amount of any lien or liens thereon."

  3. A condominium is selling its units as a 75-year lease for $100,000. Is a transfer return and fee due?

    No. A lease less than 99 years is not a conveyance of real property per state law (sec. 77.21(1), Wis. Stats.). The document recorded should include this statement, "this is a lease less than 99 years and therefore is not a conveyance as defined by sec. 77.21(1), Wis. Stats. This lease is exempt from return and fee imposed under sec. 77.22(1), Wis. Stats." The filer, not the Register of Deeds, must exempt the document.

Confidentiality

  1. What precautions does the Wisconsin Department of Revenue (DOR) take to ensure the confidentiality of transfer returns when authorized individuals inspect them?

    Under state law (sec. 77.265, Wis. Stats.), transfer returns and the information contained in the returns can be disclosed to:

    • Local assessors, their agents or employees

    • County property lister, treasurer and register of deeds

    • Employees of governmental agencies acquiring real property for public purposes

    • Department of Workforce Development under sec. 106.50, Wis. Stats.

    • Property owners or their agents in condemnation proceedings or in appeals of their property tax assessment

    • A county that would like the returns to develop a tract index if the county does not reveal the Social Security Numbers of the buyers and sellers

    DOR may make all information from transfer returns (except social security numbers, phone numbers and email addresses) available to the public:

    • If you visit a property tax district office to view a transfer return, you must provide proof of identity

    • If a governmental agency requests to view a transfer return, the agency must provide an agency authorization letter

    In cases of a condemnation proceeding or an appeal of an assessment:

    • If an agent, make a copy of the agreement appointing the agents

    • If an assessment appeal, request a copy of the objection form. Contact the clerk of the taxing district where the objection form was filed.

    • Record all forms that were photocopied on Form 709, "Request to Examine Real Estate Transfer Returns," listing county document numbers, volume and page

    • Persons obtaining photocopies of transfers must write their name and date on the bottom of each copy

    • A judge must authorize a subpoena to view or copy a transfer

    • Persons requesting copies of their own returns through an agent must provide the agent with a limited power of attorney

Conversions

  1. What are the filing requirements for mergers or conversions with an effective date of July 1, 2016 or after, under state law (sec. 73.14, Wis. Stats.)?

    There are no filing requirements. Under the 2015 Act 295 the requirement to file the MC-500 Merger Conversion Report required under state law (sec 73.14, Wis. Stats.) was repealed.

  2. What are the filing requirements for mergers or conversions with an effective date prior to July 1, 2016, under state law (sec. 73.14, Wis. Stats.)?

    If an acquired business entity in a merger or the converted business entity in a conversion had a fee simple ownership interest in any Wisconsin real estate immediately prior to the merger or conversion, the surviving business must submit an MC-500 Report to the Wisconsin Department of Revenue no later than 60 days after the effective date of the merger or conversion. Failure to file the report within the time frame or to specify the municipalities affected results in penalties under state law (sec. 73.14(2), Wis. Stats.). It is optional to record deeds changing title to the property with the county Register of Deeds. The MC-500 Report is located on our website at: https://ww2.revenue.wi.gov/Internet/merger.html.

    MC-500 Report provides:

    • Name/ownership change - so record title and the address for future tax bills can be updated for the property(s) listed

    • New owner's name listed under the "Surviving Entity" - the tax bill should be sent to the new owner at the address listed in the property description section.

    • Authorized person - if a tax bill address is not specified in the property description section, the tax bill should be sent to the person authorized to submit the report (located at the bottom of the report)

    Note: Under state law (sec. 73.14(2)(a), Wis. Stats.), you are charged a $200 penalty for each day the report is late, not to exceed $7,500.

Corporations

  1. What is the 3-year requirement for the exemption in state law (sec. 77.25(15), Wis. Stats.), for corporations?

  2. This requirement only applies to conveyances from the corporation. To qualify for the exemption in state law (sec. 77.25(15), Wis. Stats.), the corporation must have had title to the property for three or more years prior to the conveyance, in addition to the other stated requirements. The holding period requirement does not apply for conveyances to the corporation.

  3. If a corporation deeds its property to the corporation's president for no consideration, will a transfer fee apply?

    Yes. Unless one of the exceptions in state law (sec. 77.25, Wis. Stats.), can be applied. The only exemption that could be applied to a conveyance between a corporation and an individual is sec. 77.25(15), Wis. Stats. For sec. 77.25(15) to apply, all three of the following requirements must be met:

    • President is a shareholder and all the shareholders are related as required by the exemption

    • Conveyance is for no consideration other than surrender of stock and/or the assumption of debt

    • Corporation has owned the property three or more years prior to the conveyance

Corrections (before Register of Deeds records the eRETR)

  1. Can you describe the eRETR correction procedure?

    The following describes the eRETR correction procedure: If an error is discovered on a real estate transfer before the Register of Deeds records the transfer, the Register of Deeds will call the preparer at the number listed on the bottom of the receipt and notify him/her of the errors. After being notified by the Register of Deeds, the preparer needs to:

    • Return to the eRETR web page. "Restore" the saved file and make the necessary corrections.

    • Once you make all corrections, select "Submit" and print the new receipt (which will have a different receipt number)

    • Note: Each time you click the "Submit" button, it creates a new receipt number. Make sure you make all necessary corrections before clicking "Submit." The preparer should save a copy of the corrected file.

    • After the corrections are resubmitted, the preparer should send or deliver the new receipt to the Register of Deeds

    • The Register of Deeds will then enter the new receipt number. Once the Register of Deeds receives the receipt for the corrected return, you may discard the receipt for the original incorrect return.

    • To view and print the "Register of Deeds Criteria for an Electronic Real Estate Transfer Return (eRETR)," visit: revenue.wi.gov/Pages/Publications/slf-pe100e.aspx

  2. If I do not have a document number, how do I file an Amended Real Estate Transfer Return (PE-500x)?

    • A document number is generated after a deed is recorded. An Amended Real Estate Transfer Return (PE-500x) is only used after a deed is recorded and an error is discovered.

    • If you discover an error before you receive a document number, you can correct the error by doing one of the following:

      • If while electronically filing the eRETR, you see an error noted on the Summary page, go back to the section with the error and make the correction before clicking "Submit"

      • If you discover an error after you already submitted your return (clicked the green "Submit" button), return to the eRETR home page and restore the saved file. Select "Start" and then "Restore Saved Information" (located on the right side below the "Remaining time" counter). Locate the file on your computer using the "Browse" function and then select "Upload File." Make the correction, save and click "Submit."  You will get a receipt with a new receipt number to send in with document. Discard the "old" receipt. (Note: If you did not save the return, you must complete a new eRETR.)

      • If the deed is already recorded by the Register of Deeds, you may file an Amended Real Estate Transfer Return (Form PE-500x) to correct the error.

Note: If you need to re-record a deed or record an affidavit of correction, you must file another eRETR. You may not use an amended real estate transfer return (Form PE-500x) for this purpose. You can only file a Form PE-500x after a deed is recorded and if the error is only on the eRETR.

Corrections (after eRETR being recorded by Register of Deeds)

  1. How should I complete a transfer return when a deed is recorded correcting or reforming a previously recorded deed?

    Fill out the return the same as the original, except for the following:

    • Correct the items that need changing (ex: name of grantor, grantee, legal description)

    • Under "Type of Transfer," check "other" and explain what you are correcting/reforming

    • List the real estate value being transferred as zero (0)

    • Select Exemption 3 (sec. 77.25(3), Wis. Stats.), which exempts the deed from the real estate transfer fee, and enter the document number of the document being corrected

  2. How do I correct a transfer return after the Register of Deeds records it?

    • If the deed (instrument of conveyance) is correct but you discover a mistake on the return after the Register of Deeds records it, you may file an amended Real Estate Transfer Return (Form PE-500x)

    • Note: It is not necessary to file an amended Real Estate Transfer Return for minor errors (ex: missing middle initials or minor misspellings of names).

    • If the original eRETR has a number of errors, you may want to consider re-recording your deed with a new eRETR (correcting all the mistakes). This re-recording with a new eRETR would be exempt from a transfer fee under state law (sec. 77.25(3), Wis. Stats.).

Correction Instrument/Affidavit of Correction

  1. If I record a Correction Instrument/Affidavit of Correction instead of re-recording a previously recorded deed, do I need to file a transfer return?

    • Yes. Any deed, Correction Instrument or Affidavit of Correction presented for recording, requires a transfer return (eRETR) under state law (sec. 77.22(1), Wis. Stats.). A corrective instrument is exempt from a transfer fee under state law (sec. 77.25(3), Wis. Stats.).

    • Note: State law (sec. 77.25(3), Wis. Stats.), was created with the original enactment of Ch. 77, Sub-Chapter II for Real Estate Transfer Fee in 1968. The legislature created an exemption from transfer fee for correction instruments.

FOR MORE INFORMATION CONTACT:

MS 6-97
WISCONSIN DEPARTMENT OF REVENUE
Local Government Services Bureau
PO Box 8971
Madison, WI 53708-8971
Phone: (608) 264-6885 or (608) 266-1594
Fax: (608) 264-6897
Email additional questions to DORERealEstateTransfer@wisconsin.gov

​May 4, 2016