Ending "Chasing Sales" to Ensure Fair Assessments for All

Wisconsin’s constitution requires all property tax assessments to be assessed uniformly. Known as the “uniformity clause” in the state's constitution, "the rule of taxation shall be uniform" language was inserted in the constitution in the 1800s to prevent state and local lawmakers from giving preferential treatment to some property owners over others.

The Wisconsin Supreme Court recognized the purpose of the uniformity clause is “to protect the citizen against unequal, and consequently unjust taxation” in Weeks v. Milwaukee.

To ensure that property assessments are accurate and fair, state law requires municipalities to maintain the assessed value of each major class of property within 10% of fair market value once every five years. When assessed values fall outside this acceptable range, assessors are supposed to perform complete revaluations of the properties, which require a closer examination of each property to make sure the information on the property is accurate and the value reflects current market conditions. 

Many communities, however, do not perform regular revaluations; some assess every few years, while others wait 10 years or longer. For example, Milwaukee performs citywide assessment revaluations every year, which include an analysis of sales in the previous year and any necessary adjustments.

Communities commonly perform regular “maintenance” on their assessments, which includes making adjustments to individual properties based on recent sales or projects such as additions or remodels.

According to Wisconsin Department of Revenue (DOR) guidelines and rules, basing the assessment solely on the recent sale of a property, referred to as “chasing sales,” violates the uniformity clause.

DOR guidelines state:

“... singling out specific properties as a result of a sale during a maintenance assessment is in direct conflict with the Wisconsin Property Assessment Manual. The practice results in non-uniform assessments.” 

Although the DOR prohibits chasing sales, assessors regularly increase the assessed value of property based on a recent sale. A Milwaukee Journal Sentinel analysis in 2014 found that at least 5% of the new assessments were identical to a property’s selling price. For example, a Racine county assessor admitted to using the sale price to establish the assessed value for 20% of the properties that sold in two communities she assessed.

When assessors adjust the value of individual properties based on market conditions without adjusting the values of all other properties in the neighborhood or community, the properties are not assessed fairly or uniformly. If all property is assessed based on the same market conditions and the same methodology, then all property owners pay their fair share even if all the properties are over-assessed or under-assessed.

While the sale of a property is important information to be considered in the assessment, the uniformity clause prohibits the sale from being the sole basis for the assessment. Other factors related to the sale must be considered, including days on market and sales of other comparable properties in the neighborhood.

In 2019, Wisconsin stopped the practice of chasing sales with the passage of 2019 Wisconsin Act 114, designed to prevent this practice by assessors from continuing and protected new homebuyers from paying more than their fair share of property taxes.