CONVERSION CHARGE FOR FARMLAND CONVERTED TO DIFFERENT USE

Farmland converted to a 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, rather than its market value. The conversion charge is imposed on those who change the use of property classified as agricultural, which has benefited from lower property taxes as a result of use-value assessments.

The conversion charge is assessed when the land is converted to a residential, commercial or manufacturing use. In addition, land is subject to a conversion charge if it becomes tax-exempt and its use is no longer agricultural. There is no conversion charge however if land changes from an agricultural use to Undeveloped, Agricultural Forest, Productive Forest or Other as defined by law. Classifications of land may be appealed by making an appointment to appear before Board of Review.

Under the formula the conversion charge is the difference between the average market value of cropland sold in the county and the use-value amount of that land. The conversion charge is applied at different rates based on the number of acres converted. For 10 or fewer acres the penalty equals 10% of the difference between market value and use value. For 10 to 30 acres the conversion charge is 7.5% of the difference. The conversion charge for more than 30 acres is 5% of the difference. If the difference is under $25 per acre the conversion charge is not assessed.

The conversion charge for agricultural land converted in Rock County in calendar year 2016, assessed in 2017, is as follows.

  • $326 per acre if the converted land is more than 30 acres.
  • $490 per acre is the converted land is between 10 and 30 acres.
  • $653 per acre if the converted land is less than 10 acres.

The assessor reviews the classification changes, identifies parcels subject to the use value conversion charge and notifies the County Treasurer within 15 days after Board of Review has adjourned. The County Treasurer is responsible for the administration of the conversion charge. Under the use-value law, sellers are required to give buyers notice that the land has been assessed as agricultural land, whether a conversion charge has been assessed on the land or whether there is a conversion charge deferral on the land.

For further information on the penalty see the Wisconsin Department of Revenue website or Wisconsin Statute 74.485.

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