Real Estate Transfer Fee Common Questions

Timber, Mineral, Air Rights

  1. What are the requirements for filing a real estate transfer and payment of the transfer fee of timber and mineral rights?

Timeshares

  1. Are timeshares subject to the Real Estate Transfer Fee?
  2. A timeshare week is being deeded to the owners' association in satisfaction of unpaid timeshare assessments. The market value is $1,500 per week.  Are transfer fees due on this conveyance?

Transfer by Affidavit

  1. I have to record a Transfer by Affidavit (PR-1831) with the Real Estate Transfer Return (PE-500) under state law (sec. 77.22(1), Stats.), since the assets include real estate. What real estate value do I put on the transfer return?
  2. Is a transfer return required when a Transfer by Affidavit (PR-1831) is recorded and includes real estate?

Transfer Fee Miscellaneous

  1. Why is another transfer fee due on an assignment of a vendee's interest in a land contract, when the fee was paid on the original land contract?
  2. What is the measure of the fee when a vendee sells his/her interest in an original land contract for $100,000 and there is a balance owing on the land contract in the amount of $100,000?
  3. An unmarried couple owns a house as joint tenants and now one wants to convey her interest to the other owner. Is a transfer fee due, and if so, how is the fee computed?
  4. The current owner of the real property is a profit sharing plan, which purchased the property for $70,000. The profit sharing plan agrees to sell the property to the grantee for $70,000. The grantee wants to build a house on the property. The grantee has applied for financing for the property and the improvements in the amount of $255,050. The bank disburses the funds until the grantee gets the property (land and home) in his/her name. The financing will pay the profit sharing plan $70,000 for the land. The remaining loan proceeds will go to a builder to pay for the improvements. Should the transfer tax be figured on $70,000 or $255,050?
  5. Are expenses such as back taxes and the broker's commission, which are paid by the buyer on behalf of the seller, included in the value subject to transfer fee?
  6. Would a buyer's broker commission be included in the "Value Subject to Fee"?
  7. My boyfriend cosigned the mortgage and was put on the title with me when I purchased my home. He now wants to remove his name from the title by conveying his interest to me. Is this exempt from fee per sec. 77.25(3) or (10), Wis. Stats.?
  8. A red stop sign appears stating that the filer must enter an exemption when I am completing an eRETR to report a deed that conveys half of a property to a tenant in common. If no exemption is applicable, what entry is required to remove the stop sign for completion of the eRETR?

Transfer on Death Deed (TOD Deed)

  1. Explain the filing requirements for the exemptions under the following state laws:
    Sec. 77.25(10m), Wis. Stats., solely to designate a TOD beneficiary under state law (sec. 705.15, Wis. Stats.) and Sec. 77.25(11m), Wis. Stats., a non-probate transfer on death under state law (sec. 705.15, Wis. Stats.)
  2. Is a transfer return with an exemption under state law (sec. 77.25(11m), Wis. Stats.), required to be filed when any of the following occur?
    1. Final judgment is recorded
    2. Personal representative's deed is recorded
    3. New TOD-110 form which pertains to non-probate transfers of real property under state law (sec. 705.15, Wis. Stats.), to a TOD beneficiary is filed?
  3. If a TOD beneficiary is designated under state law (sec. 705.15, Wis. Stats.) and the transfer return is being completed upon the death of the Grantor, is the Grantor the decedent and should the decedent's Social Security Number be used?
  4. A non-probate TOD Deed was recorded and now I want to revoke it. A Quit Claim Deed was drafted that states specifically the Deed is made per state law (sec. 705.15(3), Wis. Stats.), and is removing the beneficiary. Will a Transfer Return be needed and what exemption should be used?

Trustees Deed

  1. A trust beneficiary receives a Trustee's Deed marked "Exemption (11)" with no transfer return. Does it qualify for the exemption under sec. 77.25(11), Wis. Stats., "By will, descent, or survivorship?"

Trusts

  1. Why is a transfer return needed when creating a trust?
  2. When you have a deed to or from a trust, when filling out the eRETR, do you enter the trust name or the trustee's name as the Grantor/Grantee?
  3. Can the exemption under sec. 77.25(11), Wis. Stats., be used when conveying property from a trust to the beneficiaries?
  4. An individual creates a trust and conveys property to it. The beneficial rights to the trust are sold by the creator of the trust. (This type of trust is commonly used in Illinois.) When the rights are sold nothing is recorded since this is similar to selling stock or an interest in a partnership and is considered the transfer of personal property. Now the trustee is to convey the real property to the beneficiaries. Is the conveyance exempt from fee pursuant to sec. 77.25(9), Wis. Stats.?
  5. Is a transfer return required when a Trustee's Deed is recorded to evidence a change of trustees? For example: property occupied by a disabled person and his parent is held in a trust and the trustee (bank) is changed to an individual successor trustee (individual) for the same trust?
  6. A daughter is quit claiming her interest in 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 requires two deeds/transfer returns?
  7. 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?
  8. Is conveying real property into a revocable living trust exempt from transfer fees, even if there is debt on the property?
  9. 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?
  10. 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?
  11. A will directs that real property be 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?

Timber, Minerals, Air Rights

  1. What are the requirements for filing a real estate transfer return and payment of the transfer fee on mineral and timber rights?

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

Timeshares

  1. Are timeshares subject to the Real Estate Transfer Fee?

    Yes. The definition of a conveyance under state law (sec. 77.21(1), Wis. Stats.), specifically provides that "instruments that are evidence of a sale of time-share property, as defined in sec. 707.02(32)" are conveyances and will require a transfer return and fee as a condition to recording the instrument, unless an exemption otherwise applies. Note: If the sale price is $1,000 or less, exemption 13 applies.

  2. 2. A timeshare week is being deeded to the owners' association in satisfaction of unpaid timeshare assessments. The market value is $1,500 per week. Are transfer fees due on this conveyance? ?

    Yes. A transfer fee is due on the fair market value of the timeshare. The transfer fee is due from the grantor. Note: If the value is $1,000 or less, exemption 13 applies.

Transfer by Affidavit

  1. I have to record a Transfer by Affidavit (PR-1831) with the Real Estate Transfer Return (PE-500) under state law (sec. 77.22(1), Stats.), since the assets include real estate. What real estate value do I put on the transfer return?

    You must use the fair market value for the real estate value on the transfer return under state law (sec. 77.21(3), Stats.). The value MUST be the fair market value and not the equitable value without regard to liens, debts or other offsets.

  2. Is a transfer return required when a Transfer by Affidavit (PR-1831) is recorded and includes real estate?

    Transfers by affidavit are subject to the same statutory requirements of the Real Estate Transfer return and fee.

    For example: If you are:

    • An heir - exemption 11 applies. If exemption 11 applies it will be exempt from a return and fee by placing the following statement on the document: "Exempt from transfer return and fee under state law (sec. 77.25(11), Wis. Stats.)."
    • A guardian - may or may not be exempt from a transfer fee depending on who he or she is the guardian of
    • A Trustee - exemption 16 may apply

Transfer Fee Miscellaneous

  1. Why is another transfer fee due on an assignment of a vendee's interest in a land contract, when the fee was paid on the original land contract?

    These transactions are two separate conveyances.   The vendee's interest in a land contract represents the equitable ownership of the property.   An assignment of the vendee's interest is equivalent to another deed of the ownership.  See Wis. Admin. Code § Tax 15.04(3).

  2. What is the measure of the fee when a vendee sells his/her interest in an original land contract for $100,000 and there is a balance owing on the land contract in the amount of $100,000?

    $200,000.The fee is computed using the full actual consideration paid, including the amount of any lien or liens thereon per sec. 77.21(3), Wis. Stats.

  3. An unmarried couple owns a house as joint tenants and now one wants to convey her interest to the other owner. Is a transfer fee due, and if so, how is the fee computed?

    A transfer fee is  due on one half the value of the property. The conveyance is not exempt as a partition under sec. 77.25(5), Wis. Stats., since there is a loss and a gain of ownership interest.

  4. The current owner of the real property is a profit sharing plan, which purchased the property for $70,000. The profit sharing plan agrees to sell the property to the grantee for $70,000. The grantee wants to build a house on the property. The grantee has applied for financing for the property and the improvements in the amount of $255,050. The bank disburses the funds until the grantee gets the property (land and home) in his/her name. The financing will pay the profit sharing plan $70,000 for the land. The remaining loan proceeds will go to a builder to pay for the improvements. Should the transfer tax be figured on $70,000 or $255,050?

    The value subject to fee is the value of real property at the time of conveyance. If the house has not yet been built, then the value of the real property is $70,000 and that figure should be used to compute the fee. If the house has been built at the time of conveyance, the value is $255,050 and the fee is computed on $255,050. See the R & R Development case that can be found  at the following link:  http://www.wisbar.org/witaxop/1999/97t212.htm

  5. Are expenses such as back taxes and the broker's commission, which are paid by the buyer on behalf of the seller, included in the value subject to transfer fee?

    Yes. Whenever a buyer pays any expenses of the seller, including the real estate broker's commission, those payments are part of the total amount paid, which is subject to the transfer fee. Section 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% upon sale. Buyer offers $93,000.00 and agrees to pay a $7,000.00 commission directly to broker. The transfer fee is on the full $100,000 since the buyer is paying the seller's broker expense in addition to the $93,000 for the property.

  6. Would a buyer's broker commission be included in the "Value Subject to Fee"?

    No. When a buyer signs a buyer's broker agreement for the broker to locate 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.

  7. My boyfriend cosigned the mortgage and was put on the title with me when I purchased my home. He now wants to remove his name from the title by conveying his interest to me. Is this exempt from fee per sec. 77.25(3) or (10), Wis. Stats.?

    No. A transfer fee is due on the conveyance of one-half the value of the property, whether or not the boyfriend paid anything. Since both of you held title to the property, he is conveying his one-half the interest in real property and Exemption (3) does not apply. Exemption (3) provides for a non-conveyance of an interest in real property; the instrument recorded merely corrects the deed that conveyed the real estate. The use of Exemption (10) is to solely provide or release Security in a debt. This exemption also does not convey an interest in real property, but merely places or releases a lien on the Property. In addition, the exemption under 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.

  8. A red stop sign appears stating that the filer must enter an exemption when I am completing an eRETR to report a deed that conveys half of a property to a tenant in common. If no exemption is applicable , what entry is required to remove the stop sign for completion of the eRETR?

    Most likely the filer is reporting the entire value of the real estate instead of one-half the value. The first box on the Fee Computation page asks for the "Real estate value transferred", not the total value of the real estate. If only 50% is transferred, enter 50% of the fair market value and then the same value would be entered in the box "Value subject to transfer fee.

Transfer on Death Deed (TOD Deed)

  1. Explain the filing requirements for the exemptions under the following state laws:
    Sec. 77.25(10m), Wis. Stats., solely to designate a TOD beneficiary under state law (sec. 705.15, Wis. Stats.) and Sec. 77.25(11m), Wis. Stats., a non-probate transfer on death under state law (sec. 705.15, Wis. Stats.)

    Sec. 77.25(10m), Wis. Stats.: Under state law (sec. 705.15(2), Wis. Stats.), a Transfer on Death (TOD) beneficiary is designated on a deed that must be recorded. When recording a TOD, a transfer return is recommended, but optional. If filing a transfer return, see eRETR Filing Tips – Transfer upon Death Beneficiary for more information.

    Sec. 77.25(11m), Wis. Stats.: A non-probate transfer of real property on death under state law (sec. 705.15, Wis. Stats.), is conveyed at the time of death of the sole owner or the last to die of multiple owners. When recording a document evidencing the termination of the decedent’s interest in the property, a transfer return is required.

  2. Is a transfer return with an exemption under state law (sec. 77.25(11m), Wis. Stats.), required to be filed when any of the following occur?
    1. Final judgment is recorded
    2. Personal representative's deed is recorded
    3. New TOD-110 form which pertains to non-probate transfers of real property under state law (sec. 705.15, Wis. Stats.), to a TOD beneficiary is filed?

    • Yes. You are required to file a transfer return in all three situations, but no fee is due when the document being recorded indicates the property is being transferred to a beneficiary who was designated on a previous recording, a transfer return is required
    • You must enter the document number on the Fee Computation page of the eRETR in the next box after selecting Exemption (11m)
  3. If a TOD beneficiary is designated under state law (sec. 705.15, Wis. Stats.) and the transfer return is being completed upon the death of the Grantor, is the Grantor the decedent and should the decedent's Social Security Number be used?

    Yes. The Grantor is the decedent and the decedent's Social Security Number should be entered.

  4. A non-probate TOD Deed was recorded and now I want to revoke it. A Quit Claim Deed was drafted that states specifically the Deed is made per state law (sec. 705.15(3), Wis. Stats.), and is removing the beneficiary. Will a Transfer Return be needed and what exemption should be used?

    If removing a TOD beneficiary under state law (sec. 705.15(3), Wis. Stats.), a transfer return is recommended, but optional. The following language must be added to the document: "This document is removing a TOD beneficiary designation only and is exempt per state law (sec. 77.25(10m), Wis. Stats."

Trustee Deed

  1. A trust beneficiary receives a Trustee's Deed marked "Exemption (11)" with no transfer return. Does it qualify for the exemption under sec. 77.25(11), Wis. Stats., "By will, descent, or survivorship?"

    No. The exemption pursuant to sec. 77.25(11), Wis. Stats., is only used for conveyances from an estate (deceased individual) made by will, decent or survivorship. The Trustee's Deed is exempt instead under sec. 77.25(9), Wis. Stats., "from a trustee to a beneficiary," as long as there was no consideration exchanged, and a return is required.

Trusts

  1. Why is a transfer return needed when creating 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 or persons of the grantor's choice (trustee/grantee), for the benefit of another (beneficiary). Therefore, because a person actually transfers ownership of his/her assets to the trust it is a conveyance per sec. 77.21, Wis. Stats., and a transfer return is generally required. A transfer fee may or may not be required depending upon the circumstances.

  2. When you have a deed to or from a trust, when filling out the eRETR, 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. The trustee's name is entered in the Agent section as agent. Sec. 701.05(1), Wis. Stats. requires that title to trust property be held in the name of the trustee. The Register of Deeds will accept the receipt as complying with the name matching rule. Note that when entering the Tax Identification Number (TIN) of the trust, it is important to know whether the trust is a revocable trust.  For a revocable trust only, a TIN is not used.  Instead, the Social Security Number of the original grantor of the trust is required.

  3. Can the exemption under sec. 77.25(11), Wis. Stats., be used when conveying property from a trust to the beneficiaries?

    No. The exemption per sec. 77.25(11), Wis. Stats., is only used for 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 there was no consideration exchanged.

  4. An Individual creates a trust and conveys property to it. The beneficial rights to the trust are sold by the creator of the trust. (This type of trust is commonly used in Illinois.) When the rights are sold, nothing is recorded since this is similar to selling stock or an interest in a partnership and is considered the transfer of personal property. Now the trustee is to convey the real property to the beneficiaries. Is the conveyance exempt from fee pursuant to sec. 77.25(9), Wis. Stats.

    No. To be exempt, the conveyance must be "from a trustee to beneficiary without actual consideration." Since the beneficiaries purchased their interest, there was consideration exchanged and, therefore, the conveyance does not meet the requirement of the exemption under sec. 77.25(9), Wis. Stats.

  5. Is a transfer return required when a Trustee's Deed is recorded to evidence a change of trustees? For example: property occupied by a disabled person and his parent 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.

  6. A daughter is quit claiming her interest in 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 requires 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 sec. 77.25(16), Wis. Stats., provided the conveyance is 1) for no consideration, and 2) the mother is the beneficiary of the trust.  Section 77.25(16), Wis. Stats., applies since the conveyance to the mother (for no consideration) would be exempt under sec. 77.25(8), Wis. Stats.

  7. 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. The trustee/father is not transferring the property directly to his children for no consideration under 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 so sec. 77.25(9), Wis. Stats., does not apply.

  8. 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 sec. 77.25(16), Wis. Stats., would still apply provided that  the transfer from the grantor to the beneficiary would be exempt under some other exemption of sec. 77.25 Wis. Stats.

  9. 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. The balance of the land contract assumed constitutes consideration, therefore the exemptions under secs. 77.25(16) and (8) do not apply. 

  10. 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?

    No, the sale of the beneficiaries' rights is considered the sale of personal property -similar to common stock sales-and is not recorded.  However, the transfer of the real property from the trust to the new "beneficiary" is subject to the transfer fee. The exemption under sec. 77.25(9), Wis. Stats., does not apply because the new beneficiary purchased their interest in the trust and this constitutes consideration.

  11. A will directs that real property be 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 pursuant to sec. 77.25(11), Wis. Stats., applies, "By will, descent or survivorship". There is no return or fee due.

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

June 3, 2014