AGRICULTURAL USE-VALUE CHARGE FOR CONVERSION WORKSHEET

Guide to Estimating Charge for Conversion of Agricultural Land

Property that has benefited from lower property taxes due to its use value assessment as agricultural land may be subject to a Conversion Charge.  This occurs when its use is converted to a residential, commercial, or manufacturing, or becomes exempt and the use is no longer agricultural. The Conversion Charge is effective upon the assessor’s completion of the assessment roll in the year following the change in use.  Sec.74.485, WI Statutes governs the application of the Conversion Charge.

The County Treasurer is responsible for the administration of the Conversion Charge. However, the treasurer cannot act until the actual change in use, verified by a change in class on the assessment roll, is complete.  This occurs after the assessor has submitted the roll to the local Board of Review (BOR), which will resolve any outstanding issues with the assessor’s decision on the proper classification.  Once the BOR is complete (typically between May and October), the assessor must provide the County Treasurer a list of the owners who converted use of agricultural acreage in the previous year. Conversion Charges are issued with a due date within 30 days of issue.  Unpaid Conversion Charges will be added as special charges on the next property tax bill.

For those who want to estimate the Conversion Charge amount prior to the actual calculation by the County Treasurer, whether for estimating project costs, negotiation of purchase, or for escrow at closing, we offer the following:

  1. Determine who will be liable for the Conversion Charge.  The person owning the property at the time of the conversion will receive the bill.  For example: Developer/Grantor begins construction of a house in March; Even if the house is sold in September, the Conversion Charge will be due from the grantor, not the grantee; The grantor is required by law to give the grantee notice of the Conversion Charge status.

  2. Determine how many acres had been assessed as ‘agricultural use’ the prior January 1 and are being converted.  For example: 8 acres had been a corn field but now consists of a house, lawn and 5 acres of corn field; 3 acres were converted and are eligible for the Conversion Charge.

  3. Determine the proper Conversion Charge per acre (the larger the number of acres converted, the smaller the charge).  This is based on the number of changed acres by the same owner in the same community.  For example: If the owner in the above example converted another 12 acres in the same community in the same year, they would have a 15 acre Conversion Charge.

  4. Multiply the # of changed acres times the Conversion Charge per acre in the county.  For example: 15 acres x $594= a Conversion Charge of $8,910

Number of acres assessed the prior January 1 as agricultural use whose use has been converted on current January 1 assessment roll. Multiply By

$396 if 30+ acres were converted

$594 if 10-30 acres were converted

$793 if less than 10 acres were converted 		Equals ESTIMATED Conversion Charge due

Note: See the Wisconsin Department of Revenue website for ‘Questions and Answers', Agricultural Assessment Guide, and a listing of conversion charges by county.