Wis. Admin. Code § Tax 14.04 — Property taxes accrued

Tax 14.04(1) (1) Purpose. This section clarifies the meaning of “property taxes accrued” as the term applies to homestead credit claims.

Tax 14.04(2) (2) Definition. Under s. 71.52 (7) , Stats., “property taxes accrued” means real or personal property taxes or monthly parking permit fees under s. 66.0435 (3) (c) , Stats., exclusive of special assessments, delinquent interest and charges for service, levied under ch. 70 , Stats., on a homestead owned by a claimant or a member of the claimant’s household, less the tax credit, if any, afforded in respect of the property by s. 79.10 , Stats. With respect to sub. (3) (e) , “property taxes accrued” means the property taxes accrued levied on the former homestead owned by the claimant.

Tax 14.04(3) (3) Qualifying property taxes.

Tax 14.04(3)(a) (a) Property taxes shall be levied on a homestead or former homestead to qualify as “property taxes accrued.”Property taxes are levied when the tax roll is delivered to the local treasurer for collection, usually on or near December 15 of each year.

Tax 14.04(3)(b) (b) The property taxes accrued on a homestead or former homestead for the year to which a claim relates need not be paid prior to filing a homestead credit claim. The fact that the property taxes accrued on the homestead or former homestead are delinquent for years prior to the year to which a claim relates does not disqualify the claimant.

Tax 14.04(3)(c) (c) “Property taxes accrued” includes personal property taxes assessed on a homestead or former homestead that is constructed on leased land or assessed on a mobile home owned by the claimant or a member of the claimant’s household. “Property taxes accrued” also includes mobile home parking permit fees assessed under s. 66.0435 (3) (c) , Stats., for a mobile home owned by the claimant or a member of the claimant’s household.

Tax 14.04(3)(d) (d) Under s. 71.52 (3) , Stats., a buyer of a homestead or former homestead in possession under a land contract shall be entitled to claim the property taxes accrued on the homestead or former homestead.

Tax 14.04(3)(e) (e) Under s. 71.54 (2) (c) 2. , Stats., if a claimant has moved from a homestead owned by the claimant to housing that is exempt from taxation under ch. 70 , Stats., other than housing for which payments in lieu of taxes are made under s. 66.1201 (22) , Stats., and other than a correctional or detention facility, a claim or claims may be allowed based on the property taxes accrued on that former homestead, provided the claimant has attempted to sell the former homestead. The property taxes accrued on the former homestead may be claimed for the period of time ending on the earliest date any of the events in subds. 1. to 4. occurs. If the earliest date any of those events occurs is in the calendar year following the year in which the claimant moves to the tax-exempt housing, the property taxes accrued shall be prorated from the date of the move to December 31 on a claim for the calendar year in which the move occurs, and from January 1 to the earliest date any of the events in subds. 1. to 4. occurs on a claim for the succeeding calendar year. The events after which the property taxes accrued on the former homestead may no longer be claimed are as follows:

Tax 14.04(3)(e)1. 1. The claimant ceases to own the former homestead.

Tax 14.04(3)(e)2. 2. The claimant begins to rent out or lease out the former homestead.

Tax 14.04(3)(e)3. 3. The claimant ceases to reside in the tax-exempt housing.

Tax 14.04(3)(e)4. 4. Twelve months of time elapses from the date of moving to the tax-exempt housing.

Tax 14.04(4) (4) Verification of property taxes accrued.

Tax 14.04(4)(a) (a) Except as provided in pars. (b) and (c) , a claimant who claims property taxes accrued shall submit with the homestead credit claim a copy of the property tax bill, or if not available, a substitute for the property tax bill containing equivalent information to that appearing on the original property tax bill.

Tax 14.04(4)(b) (b) If a claimant sells a homestead during the year to which a claim for homestead credit relates, proper verification of property taxes accrued shall be a copy of one of the following documents:

Tax 14.04(4)(b)1. 1. The closing agreement from the sale of the homestead.

Tax 14.04(4)(b)2. 2. The property tax bill for the year prior to the year to which the claim relates.

Tax 14.04(4)(b)3. 3. The property tax bill for the year to which the claim relates.

Tax 14.04(4)(c) (c) If a claimant’s homestead is a mobile home owned by the claimant or a member of the claimant’s household, on which parking permit fees are assessed under s. 66.0435 (3) (c) , Stats., proper verification of property taxes accrued shall be a copy of the parking permit fee statement issued by an authorized representative of the municipality in which the mobile home was located, or if the claimant paid rent for the land on which the mobile home was located and also paid parking permit fees to a landlord, a statement of the parking permit fees paid to the landlord, signed by the landlord, such as a form I-017, “Rent Certificate.”

Tax 14.04(5) (5) Effect of relief and other public assistance.

Tax 14.04(5)(a) (a) Under s. 71.54 (2) (a) , Stats., property taxes accrued shall be reduced by one-twelfth for each month or portion of a month for which the claimant received either $400 or more of county relief under s. 59.53 (21) , Stats., or any amount of aid to families with dependent children, or “AFDC” under s. 49.19 , Stats., Wisconsin works payments for community service jobs or transitional placements under s. 49.147 (4) or (5) , Stats., or Wisconsin works payments as a caretaker of a newborn child under s. 49.148 (1m) , Stats. However, property taxes accrued need not be reduced if the assistance consists solely of foster care payments under s. 49.19 (10) (a) , Stats., non-legally responsible relative, or “NLRR” AFDC payments or kinship care payments.

Tax 14.04(5)(b) (b) County relief and other cash public assistance payments that are repaid by the claimant in the same calendar year in which they are received are not considered payments for purposes of computing the one-twelfth reduction of property taxes accrued as required by par. (a) .

Tax 14.04(6) (6) Marital property agreements. Under s. 71.52 (7) , Stats., a marital property agreement or unilateral statement under ch. 766 , Stats., has no effect in computing property taxes accrued for a person whose homestead is not the same as the homestead of that person’s spouse.

Tax 14.04(7) (7) Ownership of homestead by one person or one household. An otherwise qualified person who owns and resides in a Wisconsin homestead may claim a homestead credit based upon property taxes accrued on the homestead, even if another person pays the property taxes.

Tax 14.04(8) (8) Ownership of homestead by more than one person.

Tax 14.04(8)(a) (a) Except as provided in par. (c) , under s. 71.52 (7) , Stats., if a homestead is owned by 2 or more persons or entities as joint tenants or tenants in common or is owned as marital property or survivorship marital property and one or more of the co-owners is not a member of the claimant’s household, property taxes accrued is that part of the property taxes accrued levied on the homestead, reduced by the tax credit under s. 79.10 , Stats., that reflects the ownership percentage of the claimant and the claimant’s household.

Tax 14.04(8)(b) (b) Except as provided in par. (c) , if a qualified claimant residing in a co-owned homestead pays the property taxes accrued for a co-owner not residing in the homestead and not claiming property taxes accrued under s. 71.54 (2) (c) 2. , Stats., and sub. (3) (e) , the claimant may claim a homestead credit based upon both the claimant’s proportionate share of “property taxes accrued” as described in par. (a) and “gross rent” for the property taxes accrued paid on behalf of each absent owner, as provided in s. Tax 14.05 (3) (c) . On the other hand, if a qualified claimant residing in a co-owned homestead pays the property taxes accrued for a co-owner who also resides in the homestead but is not a member of the payor’s household, or who is claiming property taxes accrued under s. 71.54 (2) (c) 2. , Stats., and sub. (3) (e) , each co-owner may file a claim based upon that portion of the property taxes accrued that reflects the ownership percentage of each claimant and his or her household.

Tax 14.04(8)(c) (c) Under s. 71.52 (7) , Stats., if a claimant has inherited a partial ownership interest in a homestead, is entitled to possession of the property and is required by the terms of the will that transferred the ownership to pay all of the property taxes on the homestead, the claimant may claim a homestead credit based upon the entire amount of property taxes accrued on the homestead.

Tax 14.04(9) (9) Sale or purchase of homestead.

Tax 14.04(9)(a) (a) Under s. 71.52 (7) , Stats., if a claimant sells or purchases a homestead during the year to which a claim for homestead credit relates, the property taxes accrued shall be prorated for the time the seller or buyer both owned and occupied the homestead during the year. The seller may use the closing agreement, the property tax bill for the year prior to the year to which the claim relates or the property tax bill for the year to which the claim relates as the basis for computing allowable property taxes accrued. The purchaser may use only the property tax bill for the year to which the claim relates as the basis for computing allowable property taxes accrued.

Tax 14.04(9)(b) (b) Except as provided under s. 71.54 (2) (c) 2. , Stats., and sub. (3) (e) , if a seller moved from the homestead or established a homestead elsewhere before the closing date shown on a closing agreement and the property taxes are prorated on the agreement to the closing date, the property taxes shall be further prorated for homestead credit purposes to consider in the year of sale only the property taxes for the period the seller maintained a homestead on the property.

Tax 14.04(10) (10) Property taxes accrued on land.

Tax 14.04(10)(a) (a) Not part of a farm. Under s. 71.52 (3) and (7) , Stats., if a homestead is not part of a farm, property taxes accrued for land are limited to the property taxes on up to one acre of land which surrounds the homestead dwelling and is reasonably necessary to the use of the dwelling as a home. A parcel of land separated from the homestead parcel by such things as a street, river or utility right-of-way shall be considered to be a part of the homestead parcel.

Tax 14.04(10)(b) (b) Part of a farm. Under s. 71.52 (7) , Stats., if a homestead is part of a farm, property taxes accrued on up to 120 acres of land which surrounds the homestead dwelling may be claimed. Property taxes accrued for parcels of land which do not surround the homestead parcel shall be allowed if the nonsurrounding parcels are necessary to the use of the homestead parcel as a home.

Tax 14.04(11) (11) Multipurpose and multidwelling buildings. Under s. 71.52 (7) , Stats., property taxes accrued on a homestead that is part of a multipurpose or multidwelling building are the property taxes accrued on the portion occupied as a principal residence, based upon a percentage of the total property taxes accrued on the multipurpose or multidwelling building and the same percentage of the property taxes accrued on the land surrounding it which otherwise qualifies as described in sub. (10) . Property used partly as a homestead and partly for any business purpose, other than farming, for which a deduction is allowed or allowable for income tax purposes is multipurpose property. Property used partly as a homestead and partly as living quarters rented to others is multidwelling property. A building divided into 2 units, one of which is the homestead of a claimant and the other of which is the living quarters of a person who does not pay rent is multidwelling property, even though there is no business or rental use.

Tax 14.04(12) (12) Property subject to a life estate. Property taxes assessed on property subject to a life estate may only be claimed as “property taxes accrued” for purposes of homestead credit by a person in possession of the life estate interest. The life estate must be in writing and incorporated in the warranty deed or other legal documentation.