In Hot Housing Market, Real Estate Transfer Revenues Near All-Time High

The real estate transfer fee is imposed on the person selling or granting real estate and equals $3 for every $1,000 of the value of real estate property being transferred. The vast majority of these transfers are property sales. Certain transactions are exempt from the fee, such as those by units of government, property transferred as gifts, or between spouses. The fee is collected at the county level by the register of deeds, and revenue proceeds are split between the state’s general fund, which receives 80%, and the county, which receives 20%.

State and local revenues from fees on transfers of real estate in Wisconsin increased 37% in fiscal year 2021, the largest annual increase in nearly four decades. This was driven by robust increases in real estate sales and residential property values during the COVID-19 pandemic. The increase benefits state government at a time of fiscal strength, which may suggest consideration of options to share the wealth.

After rising rapidly during the real estate bubble of the mid 2000s, transfer fee revenues plunged sharply during the financial crisis and housing collapse of the Great Recession and slowly rebounded from 2011 to 2018 before plateauing the following two years. Department of Revenue data show the volume of real estate transfers and other information, such as the value of the properties, by calendar year from 2016 to 2021. At a statewide level, the number of transfers roughly held steady from calendar 2016 to 2018, ticked down slightly in 2019, then increased 5.5% in 2020 and 11% in 2021.

While the increased volumes of transfers certainly contributed to the sharp increase in fee revenues in 2021, soaring real estate values also played a key role. The growth was driven primarily by residential values, which showed strong growth throughout the five-year period from 2016 through 2021 – with a particularly pronounced uptick amid the pandemic in 2020-21.

The median value of single-family residential properties transferred in Wisconsin increased from $126,500 in 2016 to $170,000 in 2021, or 34.4%. More than half of the increase came in 2020 and 2021, the data show, with statewide increases of 7.7% and 7%, respectively.