What does it cost to take my Wisconsin land out of Managed Forest Law?

A great deal of wooded Wisconsin ground is enrolled in Managed Forest Law, often by a previous generation, and the current owner knows mainly that the tax bill is low and a forester turns up occasionally.

It is a contract, for either 25 or 50 years, with a management plan attached. If your land is going to be used for something else, the contract has to be dealt with, and that has a cost worth establishing before anybody starts talking terms.

What does withdrawal actually cost?

A withdrawal tax plus a withdrawal fee of 300 dollars. The withdrawal tax is the higher of two figures, and this is where landowners tend to estimate low.

The first figure is not the saving. It is your municipality’s total net property tax rate for the year before withdrawal, applied to the assessed value of the land for that year, multiplied by the number of years the land has been enrolled or by ten, whichever is fewer. So the multiplier is capped at ten years, but what is being multiplied is the full ordinary tax on that land, not the difference between the ordinary tax and what you actually paid.

The second figure is five percent of the stumpage value of the merchantable timber standing on the land. On well stocked ground that has not been cut in a while, this is the one that can be larger, and it is assessed by an estimator the parties agree on or a forester the circuit court appoints.

Whichever of the two is higher is what you owe, less certain amounts you have already paid under the programme. On a substantial parcel neither figure is small, and both are due from the owner.

Can the DNR make me withdraw?

Yes, and this is the part landowners tend not to know.

The department may order withdrawal where the owner fails to comply with the programme or the management plan, or develops or uses part of the parcel for a purpose incompatible with what the law is for.

Building anything of scale on enrolled land is not compatible with growing timber under a management plan. So the question is not really whether you would choose to withdraw. If the use changes, withdrawal follows, and it is better to plan it than to have it ordered.

Does it have to happen before a sale?

Not necessarily, and this is worth negotiating rather than assuming.

MFL enrollment can pass with the land in some circumstances, and the obligation can sit with whoever holds it when the use changes. Who actually bears the withdrawal cost is a term of your agreement, not a law of nature, and the default is that it lands on the owner.

So put it in the document. Who pays the withdrawal tax and the fee, and at what point. A party that has bought enrolled Wisconsin land before will have a ready answer because they have paid it. A party that has not will need to go and find out, which is itself informative.

What about the rest of my ground?

The question most likely to catch somebody out.

If only part of an enrolled parcel changes use, that does not automatically mean only that part is affected. What is enrolled, what a partial withdrawal does to the remainder, and whether the rest can stay in the programme are specific to your enrollment and your acreage.

Do not work this out from an article. Your DNR forestry contact administers this and will tell you what your particular enrollment covers.

What should I find out first?

Three things, and they are all free.

Whether the land is in MFL at all, and whether the contract is 25 or 50 years and when it ends. Many owners inherited the enrollment and have never seen the paperwork.

Whether it is designated open or closed, because the terms differ.

And roughly what a withdrawal would cost. Your DNR forestry contact can walk you through both branches of the calculation, and if your ground carries good timber it is worth asking which of the two would govern, because the answer changes the number a great deal.

Write those down before you talk to anybody. It is the same advice we would give about any covenant on land: the number is not the problem, discovering the number late is the problem, because by then it is somebody’s negotiating lever rather than a line in your own arithmetic.

Where we sit in this

We buy and take options on land for our own account with our own capital. Nobody here earns a percentage, we do not represent sellers, and your property is not passed to anybody else.

On enrolled Wisconsin ground the withdrawal cost is something we want established early, because a transaction that works before it and not after it was never a transaction. Most of what we look at does not fit anyway, usually on power, and we would rather tell you that in the first conversation.

Tell us the county, roughly the acreage, and who sends your electric bill.