Real Estate Transfer Fee Common Questions

Merger

  1. What are the filing requirements for mergers or conversions per sec. 73.14, Wis. Stats.?
  2. A foreign LLC is registered to do business in Wisconsin and has one piece of property in Wisconsin. The parent of this LLC merged into another entity. The parent is a foreign entity and is not qualified in Wisconsin. Does an MC-500 need to be filed?

Mineral Rights

  1. Has the Department changed its requirement of filing a real estate transfer return and payment of the transfer fee on mineral and timber rights?
  2. How is the transfer fee calculated on a mineral lease?
  3. When a lease is recorded and a transfer fee is paid for a mineral lease to extract gravel for a future road project, and the road project goes to another contractor, the lease is terminated, and all consideration paid is returned according to the lease terms, is the transfer fee that was paid with the recording of the lease eligible for a refund?

Mobile Homes

  1. Is a mobile home considered to be real estate or personal property when being sold with the lot? Is it subject to transfer fee?
  2. A mobile home which is on a leased site, on a foundation and hooked to water, sewer and other utilities is sold. Is the conveyance subject to the transfer fee?

Merger

  1. What are the the filing requirements for mergers or conversions per 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 the MC-500 Report to the 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 each of the municipalities affected will result in penalties per sec. 73.14(2) (a), Wis. Stats. It is optional to record deeds changing title to the property with the county Register of Deeds. The MC-500 Report's primary purpose is to give notice of where future real estate tax bills are to be sent and does not convey or change title to real estate. The MC-500 Report can be found on the Department of Revenue's website at,  https://ww2.revenue.wi.gov/internet/merger.html.

    Note: Sec. 73.14(2)(a), Wis. Stats., provides a penalty of $200 for each day that the report is late, not to exceed $7,500.

  2. A foreign LLC is registered to do business in Wisconsin and has one piece of property in Wisconsin. The parent of this LLC merged into another entity. The parent is a foreign entity and is not qualified in Wisconsin. Does an MC-500 need to be filed?

    No. The ownership of the real estate has not changed as a result of the parent's transaction. The subsidiary LLC still owns the real estate.

Mineral Rights

  1. Has the Department changed its requirement of filing a real estate transfer return and payment of the transfer fee on mineral and timber rights?

    No, our position is the same. Whenever there is a conveyance of mineral or timber rights, an electronic real estate transfer return is required since it is a conveyance of real estate per sec. 77.21(1m), Wis. Stats., and a transfer fee is required unless specifically exempt from fee under sec. 77.25, Wis. Stats.

    Note:Any type of document, lease, assignment of lease, deed or any other instrument that conveys a mineral or timber interest is subject to transfer return and transfer fee.

  2. How is the transfer fee calculated on a mineral lease?

    The transfer fee is calculated on the amount of the full actual consideration paid therefor, or to be paid, per sec. 77.21(3) (a), Wis. Stats. Below are some examples of a gravel lease for calculating the fee at the time the lease is signed:

    • Single Payment: When the lease is paid by a single payment based upon an estimate of what is to be extracted with no future payments or royalties, a transfer return and transfer fee are due based upon the single payment amount. If the amount of what is extracted exceeds the value originally reported then you must file an "Amended Real Estate Transfer Return" to report the additional consideration and pay the additional transfer fee due.
    • Royalty/Installment: When the amount of gravel to be extracted is unknown, and only a down payment is made with future royalties or other types of future payments to be made based upon extraction, the fee is initially imposed on the down payment when the document is recorded. When additional payments are made then you must file an "Amended Real Estate Transfer Return" to report the additional consideration paid for each payment.
    • No payment/consideration: When there is no down payment or other consideration paid when the lease is recorded and only royalties or other type payments are to be made based upon extraction, the use of exemption sec. 77.25(13), Wis. Stats., as a conveyance of real estate having a "value of $100.00 or less" may be used on the transfer return. When additional payments are made then you must file an "Amended Real Estate Transfer Return" to report the consideration paid for each payment.
  3. When a lease is recorded and a transfer fee is paid for a mineral lease to extract gravel for a future road project, and the road project goes to another contractor, the lease is terminated, and all consideration paid is returned according to the lease terms. Is the transfer fee that was paid with the recording of the lease eligible for a refund?

    Yes, since the lease was terminated without any gravel being taken and no consideration was given, Exemption (13) can be used. Complete an "Amended Real Estate Transfer Return": https://ww2.revenue.wi.gov/internet/pe-500x.html. Since the transfer fee is assessed against the grantor per sec. 77.22, Wis. Stats., refunds are issued to the grantor unless specifically requested otherwise.

    Note: All claims for refund must be made within 4 years of the date the mineral lease was recorded per sec. 77.26(3), Wis. Stats.

Mobile Homes

  1. Is a mobile home considered to be real estate or personal property when being sold with the lot?

    The mobile home is classified as real estate and subject to fee when the mobile home is on land owned by the homeowner, on a foundation (includes blocks) and hooked to utilities. It would be considered personal property if any of the above three requirements were not met.

  2. A mobile home which is on a leased site, on a foundation and hooked to water, sewer and other utilities is sold. Is the conveyance subject to the transfer fee?

    Yes. Real estate is defined per sec. 77.21(1m), Wis. Stats., as including improvements on leased land. Even though a mobile home is defined per sec. 70.043(1), Wis. Stats., as an improvement to real property if connected to utilities and set upon a foundation upon land owned by the mobile home owner, for transfer fee purposes, it is real estate.

    Note: A transfer fee is not due if the title to the mobile home is filled out and submitted to the Department of Transportation.

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

Page last updated March 21, 2014