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

Focus #6 • March 2022


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.

The value of homes and other properties sold last year increased at the fastest rate in the past generation, per our new analysis of fee revenues from those transactions. Wisconsin’s state and local revenues from fees on the transfer of real estate properties totaled $132.6 million in the 12-month period ending June 30, data from the state Department of Administration show. That compared to about $96.8 million in revenue for the 12-month period prior, an increase of 37%.

Inflation-adjusted fee revenues last year reached a level rivaling the height of the housing boom of 2005-06, as shown in Figure 1. State projections suggest these revenues could reach an all-time high in the current fiscal year.

The 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%.

The upward trajectory of fee revenues is one small factor among many fueling the state’s unprecedented fiscal strength. Driven in part by an increasing volume of real estate transfers during the pandemic, it also has been driven by rising property values — a trend that predated the pandemic but has accelerated during it.

A key factor that influenced the real estate market in 2021 was mortgage interest rates hitting all-time lows. Other factors included strong demand from millennials reaching home-buying age, and a limited supply of homes causing values to increase, according to a January report from the Wisconsin Realtors Association. This trend of growing residential property values – both nationally and here in Wisconsin – will have ripple effects in other areas, including local tax bases and housing affordability.


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.

These data divide real estate into five categories: single-family (defined in this dataset as one-, two- and three-unit) residential, commercial and multi-unit residential, manufacturing, agricultural, and utility/miscellaneous. Single-family transfers account for a large majority of the total, nearly 83%. The number of transfers increased annually in 2021 for all categories except manufacturing, with the largest increase in the commercial and multi-unit residential category (22%). Single-family residential real estate transfers were up 10.2%.

These data also show the calendar 2021 increase in real estate transfers happened statewide, with all but one county (Vernon) seeing growth (see Figure 2). Increases ranged from 1.1% in Green County to as much as 31% in Iron County.


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.

While especially pronounced the last two years, it should be noted that the last five years have seen a sustained statewide increase in the median value of residential property transfers. Only in 2017 was the annual statewide increase less than 5%, and it was 6.8% or more in each of the last three years. From 2016 to 2021, all but one county saw increases in the median value of single-family properties transferred; in the last year, all but nine of the state’s 72 counties saw increases.

While these increases were broadly shared, they were particularly robust in many of the state’s large urban counties. Nineteen counties saw values increase at a rate outpacing the state average over the five-year, two-year, and one-year period leading up to 2021. These include seven of the state’s 10 most populous counties – Milwaukee, Dane, Brown, Outagamie, Winnebago, Kenosha, and Rock. The total also includes some exurban counties such as Jefferson and St. Croix; counties where tourism plays an outsized role in the local real estate market, such as Sauk and Walworth; and a handful of largely rural counties.

Meanwhile, all of Wisconsin’s 100 largest municipalities saw an increase of at least 20% in median values from 2016 to 2021 (see Figure 3). Three of the six municipalities that saw the largest percentage increases during this period were among those with the lowest median property values – Beloit, Racine, and Milwaukee – with the latter two seeing increases of more than 60%.


While we set out to analyze real estate transfer fees to further our understanding of housing market trends, our analysis also raises important questions about how Wisconsin taxes real estate transfers and uses those fees. For context, we looked across the 50 states and found most collect a tax or fee on real estate transfers, including all of Wisconsin’s neighboring states, according to data from the Lincoln Institute of Land Policy.

Rates for state transfer fees in neighboring jurisdictions range from as little as $1 per $1,000 of property value in Illinois to as much as $7.50 per $1,000 in Michigan. Minnesota imposes both a deed tax on real estate transfers and a mortgage registry tax, based on the amount of mortgage debt for real property, and imposed when the mortgage is recorded.

In Wisconsin, while counties retain 20% of state fee collections, local governments such as municipalities are not permitted to implement fees or taxes on real estate transfers, and counties are not allowed to impose additional fees. Conversely, Illinois, Michigan, and Minnesota permit counties to implement additional fees. Illinois also permits an additional fee be implemented by the city of Chicago. These rates range from as little as $0.10 per $1,000 of property value for Hennepin and Ramsey counties in Minnesota to as much as $10 per $1,000 for the city of Chicago.

Notably, while state and county governments both receive a portion of transfer fee revenues in Wisconsin, their distribution has shifted over time toward the state. The current 80%-20% state-county revenue split was changed, as a result of a 1981 law, from the original 50%-50% model.


State projections anticipate a further increase in real estate transfer fee revenues during the current fiscal year. In January, the nonpartisan Legislative Fiscal Bureau’s latest revenue forecast for the current two-year state budget cycle (ending in June 2023) revised upward its projections for miscellaneous fee revenues, nearly 90% of which come from the real estate transfer fee. Miscellaneous tax and fee revenues totaled $119.6 million in fiscal year 2021 and are now projected to be $132 million in fiscal 2022 and $128 million in fiscal 2023.

One countervailing factor, however, could be the potential impact on the housing market from the recently announced Federal Reserve plan to raise short-term interest rates, which in turn should cause mortgage rates to increase.

This trend of increasing real estate transfer fee revenue provides a modest benefit for a state government now enjoying its strongest fiscal position in decades. Yet, at the same time, local governments increasingly are struggling to maintain current service levels amid tight labor markets, high inflation, and years of tight state revenue controls.

For municipalities and counties that rely heavily on the property tax, a trend of rapidly rising property values may help to hold down tax rates. Yet state levy limits largely restrict increases in local property taxes to the growth in new construction within municipal and county boundaries, thus precluding local governments from raising the overall tax levy at the same pace as appreciating property values.

While policymakers may opt to leave the levy limits largely intact, they may wish to consider real estate transfer fees among a list of potential local revenue options to support vital services. For example, the current state-county split of transfer fees could be altered to provide a more equal share to counties, or perhaps some share could be carved out for municipalities.

Meanwhile, the red-hot housing market continues to have major implications for housing affordability in the state. Rising housing costs increasingly are eating into household budgets and potentially increasing disparities in homeownership.

This last challenge is national in scope, and addressing it here in Wisconsin would be challenging and in some communities likely also would necessitate strategies to boost workers’ incomes. But a failure to do so could result in more Wisconsinites struggling to afford housing, at a time when other household expenses continue to rise.