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What methods do counties/municipalities use to foreclose on delinquent taxes or assessments?
For tax foreclosures, counties/municipalities use one of these three methods:
- Tax deed (sec. 75.14, Wis. Stats.)
- Foreclosure of certificate (sec. 75.19, Wis. Stats.)
- Foreclosure of tax liens by action in rem (sec. 75.521, Wis. Stats.)
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Is the foreclosure of delinquent taxes or assessments by a county or municipality exempt from a real estate transfer fee?
Yes. If a county/municipality has a foreclosure due to delinquent taxes or assessment, it is exempt from transfer fee under state law (sec. 77.25(14), Wis. Stats.).
Note: Exemption 2 (sec. 77.25(2), Wis. Stats.) does not apply since the county/municipality is not the grantor of the real estate.
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How do I complete a RETR for each method of tax foreclosure?
For all three methods you are required to list all of the property owners and parcels listed within the judgement. The county/municipality is not the grantor since the county/municipality does not have title. For Document type select "Foreclosure – county/municipal judgement" and for Conveyance type select "Foreclosure – county/municipal judgement". The agent for the grantor(s) is the county/municipality. To complete all other fields on a RETR, review the RETR Instructions for more detailed information.
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Is a real estate sale by a county/municipality for delinquent taxes or assessments exempt from a real estate transfer fee?
Yes. A sale of real estate by a county/municipality for delinquent taxes or assessment is exempt from transfer fee under state law (sec. 77.25(4), Wis. Stats.).
Note: A separate RETR must be filed for each sale/conveyance.
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What value is subject to fee when a vendee sells their interest in an original land contract for $100,000 and there is a $100,000 balance owed on the land contract?
The value subject to fee is $200,000, since this is the full actual amount paid (or to be paid), including the amount of any current or future liens, per state law (sec. 77.21(3), Wis. Stats.). The $200,000 value is the sum of the $100,000 cash paid plus the $100,000 balance owed on the land contract that is assumed by the buyer.
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An unmarried couple owns a house as joint tenants and now one wants to convey their interest to the other owner. Is a transfer fee due, and if so, how is the fee calculated?
Yes. A transfer fee is due on one-half the value of the property. The conveyance is not exempt as a partition under state law (sec. 77.25(5), Wis. Stats.), since there is a loss and a gain of ownership interest.
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The current owner of the real property is a profit-sharing plan that purchased the property for $75,000. The profit-sharing plan agrees to sell the property to the grantee for $75,000. The grantee wants to build a house on the property. The grantee applied for financing for the property and the improvements in the amount of $275,000. The bank disburses the funds once the grantee gets the property (land and home) in his/her name. The financing pays the profit-sharing plan $75,000 for the land. The remaining loan proceeds goes to a builder to pay for the improvements. Should the transfer tax be figured on $75,000 or $275,000?
The value subject to fee is the value of real property at the time of conveyance. If the house is not built yet, then the value of the real property is $75,000 and that figure should be used to calculate the fee. If the house is already built at the time of conveyance, the value is $275,000 and the fee is calculated on $275,000. For more information, review R & R Development Group, LLC v. Wisconsin Department of Revenue, Wisconsin Tax Appeals Commission, Docket No. 97-T-212, Decision and Order dated February 11, 1999.
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Are expenses (ex: back taxes and the broker's commission), paid by the buyer on behalf of the seller, included in the value subject to transfer fee?
Yes. When a buyer pays any expenses of the seller, including the real estate broker's commission, those payments are part of the total amount paid, and is subject to the transfer fee. State law (sec. 77.21(3)(a) Wis. Stats.), defines value as the amount of the full actual consideration paid (or to be paid) including any liens thereon.
Example: Seller lists property for sale for $100,000 with broker's commission of 7 percent upon sale. Buyer pays $100,000 and also agrees to pay the $7,000 commission directly to the broker. The transfer fee is due on$107,000 since the buyer is paying the seller's broker expense in addition to the $100,000 for the property.
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Is a buyer's broker commission included in the "Value Subject to Fee"?
No. When a buyer signs a buyer's broker agreement, where the broker locates a property on behalf of the buyer, the commission is not included in the value subject to fee. This commission does not become part of the purchase price since it is not consideration paid to or on behalf of the seller.
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My boyfriend cosigned the mortgage, and his name was included on the title when I purchased my home. Now, he would like to remove his name from the title by conveying his interest to me. Is this exempt from fee under state law (sec. 77.25(3) (5) or (10), Wis. Stats.)?
No. A transfer fee is due on the conveyance of one-half the property value, whether or not your boyfriend paid anything. Since both of you held title to the property, he is conveying his one-half interest in real property and Exemption 3 does not apply. Exemption 3 only applies to a correction of a previously recorded document, and is not for a conveyance of an interest in real property. Exemption 10 would not apply either because it is solely to provide or release security for a debt. This exemption also does not convey an interest in real property; it just places or releases a lien on the property. In addition, the exemption under state law (sec. 77.25(5), Wis. Stats.), for partition does not apply. Partition is a division among co-owners and not a conveyance that removes one person as owner, per sec. 77.21(1k), Wis. Stats.
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Why is a transfer return needed when conveying property to a trust?
A trust is an entity created by a settlor (grantor) who entrusts some or all of his/her property to be managed by a person(s) of the grantor's choice (trustee/grantee), for the benefit of another (beneficiary). Because a person actually transfers ownership of his/her assets to the trust, it is a conveyance per state law (sec. 77.21, Wis. Stats.), and a transfer return is required. A transfer fee may or may not be required depending on the circumstances.
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If you have a deed to or from a trust, when filing the RETR do you enter the trust name or the trustee's name as the Grantor/Grantee?
- In the Grantor/Grantee section, select "Trust" as the Grantor/Grantee type and enter the trust name as the Grantor/Grantee
- Enter the trustee's name in the Agent section as agent
- State law (sec. 701.05(1), Wis. Stats.), requires that the title to trust property is held in the trustee's name. The Register of Deeds accepts the receipt as complying with the name-matching rule.
Note: You are required to enter the trust's ID number. This could be the Social Security Number (SSN) of the decedent, an Individual Tax Identification Number (ITIN), or a Federal Employer Identification Number.
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Can the exemption under state law (sec. 77.25(11), Wis. Stats.), be used when conveying property from a trust to the beneficiaries?
No. The exemption per state law (sec. 77.25(11), Wis. Stats.), only applies to conveyances from an estate (deceased individual) by will, descent or survivorship. Since the property is in a trust, the exemption under sec. 77.25(9), Wis. Stats., can be used "from a trustee to beneficiary without actual consideration," as long as no consideration was exchanged.
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Is a transfer return required when a Trustee's Deed is recorded showing a change of trustees? Example: A property occupied by a disabled person is held in a trust and the trustee (bank) is changed to an individual successor trustee (individual) for the same trust?
Yes. A transfer return is required in this case. A deed filed to reflect that a new trustee is now the title holder of the real estate on behalf of a trust is a conveyance. A transfer return is required and state law (sec. 77.25(9), Wis. Stats.). Exemption 9 applies to the conveyance.
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A daughter quit claiming her interest in a property back to her mother who wishes to put the property into her trust. Can this be done with one deed/transfer return or does it require two deeds/transfer returns?
The daughter can deed the property directly to the mother's trust with one deed/transfer return and claim the exemption under state law (sec. 77.25(16), Wis. Stats.), provided the conveyance is: 1) for no consideration, and 2) the mother is the beneficiary of the trust. Sec. 77.25(16), Wis. Stats., applies since the conveyance to the mother (for no consideration) is exempt under sec. 77.25(8), Wis. Stats.
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Property is in a revocable living trust. The trustee (father) now wants to convey the real estate to a limited liability company (LLC) whose only members are his children. Is there a fee due if the real estate is transferred directly to the LLC?
Yes. A fee is due since no exemption applies. Since the trustee/father is not transferring the property directly to his children for no consideration, under state law (sec. 77.25(8), Wis. Stats.); the trustee/father is not a member of the LLC, under sec. 77.25(15s), Wis. Stats.); and the LLC is not a beneficiary of the trust; sec. 77.25(9), Wis. Stats., does not apply.
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Is conveying real property into a revocable living trust exempt from transfer fees, even if there is debt on the property?
Yes. The exemption under state law (sec. 77.25(16), Wis. Stats.), still applies provided that the transfer from the grantor to the beneficiary is exempt under another exemption of sec. 77.25 Wis. Stats.
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Is an assignment of vendee's interest in a land contract to a trust created for the benefit of the grantor's children, exempt from transfer fees?
No. Under state law (sec. 77.25(16), Wis. Stats.), the exemption applies if another exemption under sec. 77.25 applies to the direct conveyance from the settlor(s) of the trust to the beneficiary(s) of the trust. The direct conveyance from the parents to the children is not exempt from transfer fee under state law (sec. 77.25(8), Wis. Stats.), because the assignment of a vendee's interest in a land contract is a conveyance for consideration. Exemption 8 does not apply because the conveyance must be for no consideration, therefore the conveyance into the trust does not qualify for the use of Exemption 16.
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After a grantor created a trust, he conveyed real property to it. He then sold the beneficiaries' rights to the trust. Is a transfer fee due?
- Personal property - the sale of the beneficiaries' rights is considered the sale of personal property (like common stock sales) and is not recorded
- Real property - the transfer of the real property from the trust to the new "beneficiary" is subject to the transfer fee. The exemption under state law (sec. 77.25(9), Wis. Stats.), does not apply because the new beneficiary purchased his/her interest in the trust and this constitutes consideration.
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A will directs that real property is conveyed to the grandchildren of the deceased. Since the children are minors, the estate transfers the property to a trust set up for the grandchildren. Is a fee due?
No. The exemption under state law (sec. 77.25(11), Wis. Stats.), applies, "By will, descent or survivorship."
Contact us at RETR@wisconsin.gov.