Are all sales to a governmental agency exempt from fee under state law (sec. 77.25(12), Wis. Stats.), pursuant to or in lieu of condemnation?
No. Not all sales to a governmental agency are exempt from fee. The conveyance is exempt per Exemption 12 as "pursuant to or in lieu of condemnation" if the sale meets the criteria under state law (sec. 32.05, or sec. 32.06, Wis. Stats.). At a minimum the procedures under Chapter 32 for condemnation must be initiated.
Exemption does not apply when:
- Property purchased has been on the open market for sale
- Property was the final selection of many parcels for a project that could be placed anywhere.
Example: A maintenance garage is not exempt because it could be placed anywhere, as opposed to an extension of an airport runway which must be placed at the end of a runway.
Is the following satisfaction of a land contract exempt per state law (sec. 77.25(17), Wis. Stats.)? A city sells property to an individual on land contract and the transfer return is filed using Exemption 2. Later the city sells its vendor's interest in the land contract to another individual and records the assignment without a return, since the vendor's interest is a personal interest in a debt. Now the deed in satisfaction is being recorded. Does Exemption 17 apply since the land contract was exempt and the current vendor is not a governmental agency?
Yes. Since the original vendor was a governmental agency and exemption sec. 77.25(2), Wis. Stats., was properly used, the satisfaction is exempt per sec. 77.25(17), Wis. Stats., regardless of the current vendor.
When gifting property to a public school district, is this conveyance exempt from fee?
Yes. A gift to a public school district is exempt from fee per state law (sec. 77.25(2g), Wis. Stats.).
Note: A gift to a private school is subject to fee per administrative rule (Tax 15.03(5), Wis. Adm. Code), which relates to: "conveyances between an individual and a tax exempt organization."
My company just started handling the resale of properties foreclosed by Federal Home Loan Mortgage Corporation (Freddie Mac). Will a transfer fee be due when a property is sold to a new buyer, or does exemption sec. 77.25(2), Stats, apply to the sale?
Federal Home Loan Mortgage Corporation (Freddie Mac) is exempt from transfer fee per state law (sec. 77.25(2), Wis. Stats.), as an instrumentality of the United States based on Rust v. Johnson, 597 F.2d 174 (9th Cir. 1979). Freddie Mac and Federal National Mortgage Association (Fannie Mae) are exempt from transfer fee. See sec. 77.25(2), Wis. Stats. ("From the United States or from this state or from any instrumentality, agency or subdivision of either"). The exemption from real estate transfer fee is not by Freddie Mac's or Fannie Mae's charter under 12 USCS § 1732a(c), since they are subject to state and local real estate taxes.
Can you provide some examples of other governmental agencies that are exempt from transfer fee under Exemption 2?
- Department of Housing and Urban Development, 42 USCS § 3532
- Farm Credit Banks, 12 USCS § 2011 (only four exist):
- Farm Credit Bank of Texas
- Federal Land Bank Association, 12 USCS § 2031
- Production Credit Association, 12 USCS § 2091
- Veterans Administration, 38 USCS § 201
- Federal Home Loan Mortgage Corporation (Freddie Mac)
- Federal National Mortgage Association (Fannie Mae)
- Government National Mortgage Association (Ginny Mae)
- Federal Deposit Insurance Corporation
- Federal Agriculture Mortgage Corporation (Farmer Mac)
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) 264-6887