Owners of property with wetlands may receive tax break

DNR News
April 18, 2006

MADISON -Property assessment notices arriving in mail boxes across Wisconsin, and property owners with wetlands are encouraged to make sure eligible lands are properly classified to allow them to get a tax break.

Under a 2004 change to the Wisconsin property tax code, wetlands and other lands previously categorized as "swamp and waste" are now classified as "undeveloped lands" and are to be assessed at 50 percent their fair market value for purposes of calculating taxes on the land.

A free guide describing the tax treatment for undeveloped lands, including details on when wetlands should be classified as undeveloped lands, has been developed by the Wisconsin Wetlands Association and funded by the Department of Natural Resources.

"What Does It Cost to Own a Wetland" is now available at the association's Web site: www.wiscwetlands.org

Jeff Bode, who leads the DNR lakes and wetland section, hopes the tax guide can help Wisconsin protect and restore remaining wetlands. About 5.3 million acres of wetlands remain from the 10 million estimated at statehood, with more than 75 percent privately owned.

DNR has also been working with the Wisconsin Department of Revenue and Wisconsin Wetlands Association to remedy a current situation that penalizes property owners who have restored wetlands or have implemented other conservation practices such as installing stream buffers, on land previously categorized as agricultural land.

Current tax law assesses agricultural lands at a fraction of their fair market value. Even with the 50 percent property tax reduction, lands in a conservation use are often assessed substantially higher than adjacent agricultural lands, making it financially less feasible for farmers to restore wetlands or buffers along streams or lakes, says Erin O'Brien, Wisconsin Wetland Association's wetland conservation and policy specialist.

"The 2004 tax break for wetlands is a step in the right direction for removing economic barriers to wetland protection and restoration, but if it's still three to five times more expensive to hold conservation lands than farmlands, farmers have no choice but to keep every square inch of their land in a use eligible for agricultural tax breaks," O'Brien says. "We think landowners should be rewarded, not penalized, for caring for these lands on behalf of their community."

Voters at the 2006 Spring Wildlife and Fisheries Hearings held statewide April 10 overwhelmingly agreed. They supported by a 3,345 to 674 margin a Conservation Congress advisory question calling on DNR to request a legislative review of farm conservation lands to "identify and implement sensible and fair solutions to these concerns."

DNR has been partnering with the wetland association in recent years to achieve the goal of reducing the property tax burden for wetland owners and to encourage wetland restoration and preservation through tax breaks and other incentives.

O'Brien and Bode encourage people who own wetlands to review the tax guide and carefully review the details of their notices of assessment to ensure their eligible lands were properly categorized and assessed. Previously, if someone's wetlands weren't properly categorized as "wastelands," it wasn't an issue because those lands were assessed at 100 percent of their fair market value, and taxed accordingly.
"Now, with wetlands or 'undeveloped lands' being assessed at half their value, there is good reason to examine the fine print on your property tax bill," Bode says.