Farmland converted to non-farm use may be subject to a use-value conversion charge. Since 1995 agricultural land in Wisconsin has been assessed based on its agricultural productivity – use value – as opposed to its market value. As a result, land classified as agricultural benefits from lower property taxes.
A conversion charge is imposed when land is converted from agricultural use to residential, commercial, manufacturing or tax exempt use. There is no conversion charge if land is converted to classifications defined as Undeveloped, Agricultural Forest, Productive Forest or Other.
The municipal assessor reviews the classification changes and identifies those parcels subject to the agricultural use value conversion charge. Landowners may appeal classification changes by appearing before the municipal Board of Review. Within 15 days after adjournment of the Board of Review, the local assessor provides the County Treasurer a list of property owners and acreage subject to the conversion charge. The County Treasurer issues bills with payment due within 30 days. Unpaid conversion charges, with interest, are added to the property tax bill in December.
The conversion charge is determined by the State Department of Revenue and is based on the difference between the average market value of crop land sold in the county and the use value amount of that land. The conversion charge is applied at different rates depending on the number of acres converted. For fewer than ten acres the amount equals 10% of the difference between market value and use value. For 10 to 30 acres, the conversion rate is 7.5%, and for more than 30 acres the rate is 5% of the difference.
For additional information on agricultural use value conversion charges, go the Department of Revenue website.