Real Estate Transfer Fee Common Questions

Adverse Possession

  1. If a court ordered judgment awards the plaintiff's property due to adverse possession, does this need a transfer return?

Agent

  1. When is the agent section of the transfer return required to be completed?
  2. Does the agency portion of the return need to be completed if the grantor is an entity such as a trust, LLC, partnership, etc?

Agent to Principal

  1. Buyer A and Buyer C intend to purchase two adjacent lots from Seller B. Because A and C do not want B to know that C is buying lot 2, A enters into a purchase agreement to buy the two adjacent lots from B and immediately transfer lot 2 to C. Can a transfer fee be avoided on the conveyance from A to C?

Air Rights/Aviation Easement

  1. Is there a fee due on the sale of "air rights" over land?
  2. Is there a transfer fee due on the sale of an "avigation easement"?

Adverse Possession

  1. If a court ordered judgment awards the plaintiff's property due to adverse possession, does this need a transfer return?

    Yes. An action of adverse possession or "quiet title" is referred to as a declaration of interest in real property. This legal action is a correction to clarify existing property interests and is exempt from a transfer fee under state law (sec. 77.25(3), Wis. Stats.) (exemption 3). The previous document that is being corrected, is the document where the grantee originally took title to the real estate.

Agent

  1. When is the agent section of the transfer return required to be completed?

    Whenever the grantor or grantee is not an individual, the agency section must be completed (Ex: Sheriff, Fiduciary). The information would be of the person signing the documents for the grantor and person accepting the documents for the grantee. For a trust, the trust name would be entered as grantor or grantee and the trustee would be the agent. When there is more than one entity grantor or grantee and they each have different agents, enter the data for the first grantor or grantee listed. If agent for grantor and grantee is different, enter the grantor's agent on the return and list the grantee's agent information on the Legal Description Page of the eRETR. If there are questions regarding the conveyance, we need to be able to contact directly the person familiar with the conveyance. A generic phone number or address of an entity is not sufficient.

  2. Does the agency portion of the return need to be completed if the grantor is an entity such as a trust, LLC, partnership, etc?

    Yes, the person signing for the entity must complete the grantor agent portion of the return.

Agent to Principal

  1. Buyer A and Buyer C intend to purchase two adjacent lots from Seller B. Because A and C do not want B to know that C is buying lot 2, A enters into a purchase agreement to buy the two adjacent lots from B and immediately transfer lot 2 to C. Can a transfer fee be avoided on the conveyance from A to C?

    If A and C have an agency agreement between them, this is an "agent to principal" transaction and could be exempt from fee per sec. 77.25(9), Wis. Stats. The use of Exemption (9) also requires the conveyance to be for "no consideration." If A transfers lot 2 immediately after taking title from B and does not benefit from having held title other than be compensated for their time for being involved with the transactions, then Exemption (9) would apply.

Air Rights/Aviation Easement

  1. Is there a fee due on the sale of "air rights" over land?

    Yes. The sale of air rights is a sale of real estate as defined under state law (sec. 77.21(1), Wis. Stats.), and is subject to transfer return and fee. The definition under state law (sec. 990.01(35), Wis. Stats. and 63 Am. Jur. 2d Property ยง 14), states that land extends from the surface downward to the center of the earth and upward indefinitely to the skies. Modern courts have recognized that this must be balanced with the right of flight.

  2. Is there a transfer fee due on the sale of an "avigation easement"?
    • No. An "avigation easement" just grants the "right-of-flight" and the "right to restrict…" to the grantee (airport) - not "possession" by the grantee
    • Since it is not a conveyance of a real property interest as defined under state law (sec. 77.21(1) & (1m), Wis. Stats.), it is not subject to:
      • Filing a transfer return imposed under state law (sec. 77.22(1), Wis. Stats.)
      • A transfer fee imposed under state law (sec. 77.22(1), Wis. Stats.)
    • To exempt an avigation easement from transfer return and transfer fee, include the following language below the legal description:
      "This is the sale of an avigation easement only and is therefore not a conveyance as defined by state law (sec. 77.21(1), Wis. Stats.), and is exempt from transfer return and fee imposed under state law (sec. 77.22(1), Wis. Stats.)."

FOR MORE INFORMATION CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Equalization Bureau
P.O. Box 8971 MS 6-97
Madison, WI 53708-8971
Phone: (608) 264-6885 or (608) 266-1594
Fax: (608) 264-6897
E-Mail Additional Questions to eretr@revenue.wi.gov

March 19, 2014