Does a Grandchild Receiving a Gifted Property from their Grandparent Have to Pay Transfer Fees ?

The "Grandparent Exemption": Understanding 2025 Wisconsin Act 38 and Real Estate Transfer Fees

Key Takeaway for 2026: As of November 1, 2025, Wisconsin law has officially expanded the real estate transfer fee exemption to include conveyances between grandparents and grandchildren. If you are gifting property or selling it for "nominal consideration" to a grandchild, you no longer owe the state the standard $3.00 per $1,000 of value.

The Big Change: Why 2025 Wisconsin Act 38 Matters

For decades, Wisconsin law allowed parents to transfer property to their children (and vice-versa) without paying a real estate transfer fee. However, a "generational gap" existed in the statutes: if a grandmother wanted to deed her home directly to her grandson, the state required a transfer fee based on the property’s full market value—even if the home was a gift.

2025 Wisconsin Act 38 (which amended Wis. Stat. § 77.25(8)) finally closed this gap.

Does Your Transfer Qualify?

To utilize the new exemption, the transfer must meet specific criteria under the updated Section 77.25(8):

1. The Relationship: The transfer must be directly between a grandparent and a grandchild.

2. Nominal Consideration: The property must be transferred for "nominal or no consideration." This generally means it is a gift or a transfer for a small amount (e.g., $1.00) rather than a fair-market sale.

3. Proper Documentation: Even though the fee is $0, you must still file a Wisconsin Real Estate Transfer Return (e-RETR) with the Department of Revenue and cite the correct exemption code.

   
   

Why This is a Game-Changer for Wisconsin Estate Planning

Before this law, many families were forced to "double-transfer" property to avoid the fee—deeding it from grandparent to parent, then parent to child. This was not only legally cumbersome but created potential title insurance issues and extra recording costs.

With the 2025 update, grandparents can now:

• Simplify Succession Planning for family cottages or cabins.

• Directly assist grandchildren with First-Time Homeownership.

• Avoid thousands of dollars in unnecessary "closing costs" during a family gift.

  
  

Frequently Asked Questions (FAQ)

Q: Do I still have to file a transfer return if the fee is exempt? A: Yes. Every conveyance of real estate in Wisconsin requires an e-RETR. On the return, you will now select Exemption 8 to indicate the grandparent-grandchild relationship.

Q: Does this apply to step-grandchildren? A: The statute specifically mentions "stepparent and stepchild," but for grandparent-level transfers, the law focuses on the lineal relationship. If there is a non-lineal relationship, you should consult with a real estate attorney to ensure the deed is structured correctly to avoid a surprise tax bill.

Q: What about the "Generation-Skipping Transfer Tax" (GST)? A: While Wisconsin has eliminated the transfer fee, large gifts may still have federal tax implications. As of 2026, federal GST exemptions are high, but you should always coordinate with your attorney and CPA when transferring high-value assets.

How a Wisconsin Real Estate Attorney Can Help

While the law has made it cheaper to transfer property to your grandchildren, the process of drafting a Quitclaim Deed or a Warranty Deed still requires precision. A mistake in the legal description or the "nominal consideration" language can lead to a rejected filing or, worse, a "clouded" title that makes the property impossible to sell later.

Planning a family property transfer? Contact Attorney Jason Greller today to ensure your deed is drafted correctly and your 2025 Act 38 exemption is properly claimed.