by: Jay Frazier
Some folks are cheering, others are booing but the passing of the recent state budget also included the repeal of the farmland conversion fee.
For those who haven’t been following it, effective January 1, 2010 anyone that rezoned Wisconsin land from the Exclusive Ag designation (farm land) had to pay a fee that could run close to $1000. per acre. While the intent was to discourage development and protect family farms, not everyone agreed with the law. Often, retiring farmers in the hills of southwest Wisconsin had little to show for their decades of hard work other than their land. In essence, their land was their only retirement plan and the conversion fee limited their ability to get top dollar for it when they sold. Furthermore, some felt that limiting development also reduced the income potential of rural townships which placed further burden on the already stressed family farmer. So with the recent passing of the state budget which included the repeal of the conversion fee, many land owners again saw a light at the end of the tunnel.
But not everyone is pleased. For some, the light at the end of the tunnel might well be a train. After decades of urban sprawl around Wisconsin’s cities, many were hoping that the conversion fee would slow the trend and help preserve the rural farming lifestyle. Now with the conversion fee eliminated, it may be back to business as usual since buyers or sellers of rural farm property can once again rezone without incurring conversion fees.
Since buyers and sellers generally watch the bottom line, this is a positive development in the current real estate market. Having a costly fee removed from the equation will lower the total property cost and influence consumers to move forward toward a real estate transaction.