Who pays transfer taxes? | When are transfer taxes paid? | Methodology
Wisconsin's current transfer tax rate is $0.30 per $100. So, for a house worth $286,394 — the median home price in the state — the transfer tax due will be $945. It doesn’t stop there, however, as cities within the state may charge an additional fee on top of the standard rate, which can cause your total dues to increase.
The specifics on who pays the transfer tax in Wisconsin are sometimes up for negotiation, but usually the seller is responsible.
Clever Real Estate can help you cut costs here — our concierge team will partner you with an experienced agent who can help you negotiate a good deal with your buyer on transfer taxes. You'll save big by paying only 1.5% in commission, which is much less than the Wisconsin average of 2.66%.
You can't change transfer tax rates. But, an experienced Clever Real Estate agent can help you win the negotiation battle so you aren't stuck paying all of the transfer taxes on your own.
When you choose Clever, you'll work with a full-service realtor with transfer tax expertise in your local market.
Clever's service is totally free, with zero obligation — you can walk away at any time.
Who pays transfer taxes in Wisconsin: The buyer or the seller?
In Wisconsin, usually, the seller is responsible for paying the transfer tax.
When do you pay transfer taxes in Wisconsin?
Transfer taxes are paid at closing, and in most cases are paid by the seller.
How Much Are Transfer Taxes in Wisconsin?
The state of Wisconsin charges the transfer tax based on the sale price. They charge at a rate of $0.30 per $100 (or fraction thereof) of the purchase price. For a median-priced home of $286,394, a transfer tax of $945 is due.
Additionally, you may be responsible to pay local transfer taxes as well. Talk to a local agent to find out what these taxes may be.
Can You Deduct Transfer Taxes?
Unfortunately, you can't deduct transfer taxes like you can for property taxes.
As the seller, you may be responsible for paying capital gains taxes. This tax is paid to the IRS and is assessed on any profit you make over $250,000 ($500,000 for married couples).
The profit is determined by taking the sale price minus your cost basis. The cost basis includes how much you paid for the home, the cost of any repairs or upgrades, and a few other miscellaneous costs. One of which is the transfer tax bill.
How does this help you?
Imagine that you sell a home for $500,000. You purchased the home for $200,000 and made $25,000 worth of improvements to it. Your cost basis is $225,000. This means you made $275,000 of profit off the sale. You're allowed to exclude $250,000, so your capital gains taxes will be assessed on only $25,000.
The state transfer tax in Wisconsin for a sale like this adds up to $1500. You can add that to your cost basis, bringing it up to $226,500. Now your calculated profit will only be $23,500 and that's the amount you'll have to pay capital gains taxes on.
Any other local transfer taxes you have to pay are also eligible to be added to your cost basis. Every little bit helps.
Other Considerations
While you will pay any capital gains tax when you file your taxes, you can expect transfer taxes to be paid at closing. Whether you are the buyer or the seller, you will see the amount due listed on your HUD-1 settlement forms.
Buying and selling real estate is a complicated process. Transfer taxes are just one of a million details that you have to take care of.
The best way to make sure that everything gets taken care of correctly is to work with an experienced real estate agent. You may shy away from hiring a real estate agent because you want to save money on the sale. but a knowledgeable agent is worth their weight in gold.
Not only do they help to relieve a lot of stress during the process, but they also make sure that all the little details are taken care of. It's not every day that you are involved in a real estate transaction. but real estate agents are. The expertise that they bring to the table is invaluable.
Clever can partner you with a local real estate agent who knows how to deal with the state’s tax and helps negotiate a deal in your favor. What’s more, our agents charge only a 1.5% listing fee compared to the state average of 2.66%! The money you'll save can more than offset the cost of the transfer taxes.
» SAVE: Learn more about how a Clever agent can help you navigate Wisconsin transfer taxes
Methodology
- Transfer tax amounts are based on government website information as of February 2024.
- We gathered our listing commission rate data from a December 2023 survey of 630 of our partner agents.
- Home values, list prices, and sale prices are based on Zillow data as of February 2024.
