While it might seem simple on paper, property owners selling property in Wisconsin is not as simple as throwing up a “for sale” sign and waiting for the best offer. You must meet several requirements to have a legal sale, and neglecting any part of those requirements can delay, stop, or even cancel a sale.
Of all the requirements, one of the most important is personal property tax compliance. It includes the traditional property tax bill and other local and state taxes based on the valuation of a local assessor, the market value of a property, and the total amount the property sells for.
Here is a summary of taxes in Wisconsin, Milwaukee taxes, and property owner rights.
Wisconsin Property Tax Laws
General property taxes primarily fall under the jurisdiction of county treasurers in local Wisconsin governments. They depend on a property tax assessment governed by Wisconsin statutes.
A local government taxing district includes:
- School districts, including any school levy to offset capital improvement projects
- Technical college districts
- Special districts (sanitary, sewer, lakes, conservation forest land, entertainment complexes, etc.)
All “tangible real property” includes land, buildings on that land, and personal property with no land attached. This term also covers land purchased by companies that buy houses in Wisconsin. Tangible real property is subject to a personal property tax unless a property tax exemption offsets the property taxation.
Exemptions cover federally owned land, land owned and used by churches, educational facilities, charity facilities, and non-profit hospitals and housing. Additionally, special property tax exemptions apply to selected items:
- Household personal property
- Manufacturing machinery and equipment
- Waste treatment equipment
- Bank accounts
- Corporate securities
- Conservation forest land
Unlike Wisconsin sales or income tax, the state’s role with personal property taxes is primarily administrative. The property tax is considered an “according to property value” tax, which means it is contingent on the state laws governing how:
- An assessor determines its value
- The assessment ratio
- The assessment appeal processes, including Board of Assessors hearings
- Any taxes applied by municipality or and country government taxation districts
While the individual property tax is not due when the property sells, the homeowner must pay any outstanding property taxes before transferring the title. This stipulation includes if the seller is trying to sell a house with a tax lien. The only exception is if a contract states otherwise.
Homeowners must pay a transfer tax levy in Wisconsin upon the sale of a property. They pay the tax to the State of Wisconsin Treasury in Madison.
Wisconsin sets the transfer tax rate a county treasurer can charge at 30 cents on every $100 transaction value. For example, if a home sold for $350,000.00, the transfer tax would be $.3 X 3500, or $1050.00.
You must fill out a Real Estate Transfer Return form for all covered real estate transactions, including those governing mobile homes. You can file this form with the Wisconsin Department of Revenue in person, by mail, or electronically. It is an affidavit affirming compliance with the real estate transfer fee.
The filing process applies to everyone, from cash home buyers in Elm Grove to corporate developers in Milwaukee and everything in between.
Any associated fees or taxes are due upon submission of the form.
Milwaukee Tax Laws
The City of Milwaukee has no real property tax. There are, however, taxes and fees that apply to real estate sales. These apply to private sales and open market sales.
For costing purposes, counties and municipalities charging fees are included in this summary. Regardless of this information, you should still consult a Milwaukee property tax guide.
All real estate documents have a recording fee, which is considered part of the tax burden. In Milwaukee County, the recording fee is $30 per real estate document, regardless of how many pages are in the submitted document.
Homeowners are not part of a tax roll just because they paid a recording fee.
The transfer fee for the County of Milwaukie, Wisconsin, is $3 per $1000 in assessed value, regardless of the equalized value of the property.
Every real estate transaction must have an associated Wisconsin Real Estate Transfer Return (with the appropriate fee paid or a transfer tax exemption number on the return.) The return covers:
- Land Contracts
- Other Instruments of Conveyance
When recording a real estate document, the filer must pay the fee and provide the transfer return. The form is then recorded in the receipt order.
Any real estate documents submitted will be returned to the filer within three weeks.
Who Is Responsible for Setting Taxes
Taxes fall under the jurisdiction of three entities in the state of Wisconsin:
- The state legislature
- County government
- Local government
Taxes coming from the state originate via a bill in the Wisconsin Assembly, a legislative body similar to the United States House of Representatives. Tax bills get passed by the Assembly and then the Senate and then signed into law by the Governor. Currently, Wisconsin has a 5 percent property tax, which is the largest source of revenue raised by the state.
In addition, every county in Wisconsin has the option of adding half a percent to the state’s 5 percent sales tax. After that, local governments have taxes and fees for real estate sales. How these taxes and fees apply depends on the property’s classification and disposition, plus its assessed, sale, and equalized value.
What Are Your Tax Rights
Just like you have certain rights as a US taxpayer, you also have rights as a Wisconsin taxpayer. Here is a summary of the rights of all Wisconsin taxpayers, regardless of their filing status or taxes owed, including those engaging in real estate transactions.
Courteous Treatment by Department of Revenue Employees
Every taxpayer will receive fair treatment from all DOR employees as a fundamental right. Taxpayers that feel they have not received professional and courteous treatment can contact the employee’s supervisor by calling or writing to the Department of Revenue Office the offending employee works at.
Access to Wisconsin Tax Law Information
You also are entitled to information about Wisconsin’s tax laws, tax stats, and state aid. That includes:
- Basic instruction on filing, eligibility, applicability, exemptions, and tax responsibilities
- Informational brochures
- Specialized fliers
- Online, website access
- Tax Forms and Instructions
In addition, every taxpayer has access to more detailed tax publications, such as the Wisconsin Tax Bulletin, Speakers Bureau, and Tax Seminars.
Pertinent information not protected by privacy laws or of personal nature will be available for all appropriate requests for information.
Assistance from DOR with State Tax Forms
In addition to being friendly, courteous, and professional, the Wisconsin DOR team will assist with tax forms in one of the six state-wide DOR offices. The assistance is provided in-person, over the phone, and online (you can start the process at wisconsin.gov.) The information you can receive help for includes current and past years’ tax forms and prior year tax returns.
Privacy and Confidentiality
Your taxpayers’ rights guarantee that your personal and financial information will be kept confidential. Additionally, you have the right to know why you are asked for specific information from DOR personnel, exactly how that information will be used, including in criminal actions, and the consequences of not yielding the information requested.
You receive protection in the following ways.
DOR can share your financial and tax information with authorized agents of the federal government, other states, and other Wisconsin state agencies with which DOR has information exchange agreements. Those entities, however, are also bound by the confidentiality laws that preside via the Taxpayers’ Bill of Rights.
Tax Payment Information
A resident of Wisconsin can request and receive information about the amount of Wisconsin net income tax or franchise tax paid by you. You, however, will be notified by DOR regarding who requested the information and when.
Further, the person requesting such information has no right to access, examine, or obtain any information from your return – other than the payable amount.
Pay Only Required Tax
You are required to pay the least amount of tax that is due under Wisconsin law. You are liable only for the correct amount of tax under the law. The law is applied consistently, fairly, and accurately across all taxpayers.
You are entitled to a refund for any penalties because of incorrect advice from the DOR in response to a specific written request you made waived. To be eligible for the refund, you must show that you provided sufficient and accurate information that helped formulate the DOR response. You also must show you filed your return after receiving the advice.
Prompt Refunds and Appropriate Interest
If you feel the tax amount you paid is not accurate, you have a right to file for a refund up to four years past the filing date.
This rule applies to any property tax credit that you can prove the government owes you. You also will receive any interest that accrued on the incorrect amount after it has been in Wisconsin’s possession for more than 90 days.
Fair Treatment During Audits
You have the right to the presumption of innocence if the government audits you. When audited, you have a right to pose questions to an attorney, accountant, or representative during any DOR meetings. If you do, DOR will stop and reschedule the interview, except in cases where the meeting occurred because of a subpoena.
Appeal DOR Determinations
You have the right to appeal any decisions made by DOR about adjustments, assessment, refund notices, or refund denial notices. You can file a claim for a refund for any or all of any payments you made against the tax amount due.
Selling a property in Wisconsin has specific requirements, including taxes and fees at the state and local levels. Property sellers in Wisconsin have protections from a robust Taxpayers’ Bill of Rights, so make sure to familiarize yourself with the taxation rules before selling.
If you’re interested in selling your property fast, let us know because we buy houses in Milwaukee and other Wisconsin areas. We can go over any taxes involved in the simple cash home buying process.