Understanding property taxes is crucial for homeowners and prospective buyers. This comprehensive guide explores how property taxes are calculated in South Dakota, compares rates across counties, and provides actionable insights to manage your tax obligations effectively.
Introduction
Are you a homeowner or planning to buy property in South Dakota? Navigating the state’s property tax system can be challenging, especially with rising rates and varying county regulations. This guide aims to demystify South Dakota property taxes, offering clear explanations, practical calculation methods, and county-specific insights to help you make informed financial decisions.
Key Takeaways
- South Dakota’s average effective property tax rate is 1.08%, higher than the national average of 0.99%.
- Property taxes are assessed based on the market value of residential properties.
- Homeowners in specific counties like Lincoln and Pennington may face higher tax rates.
- South Dakota offers a property tax discount for owner-occupied principal residences.
- Legislative efforts are underway to address rising property taxes in 2024.
- Use our step-by-step guide to calculate your property taxes accurately.
Definition and Explanation
Property tax in South Dakota is a levy imposed by various local government entities, including school districts, municipalities, counties, and special districts. These taxes are calculated based on the assessed market value of residential properties. The effective property tax rate is expressed in mills, where one mill equals $1 of tax per $1,000 of property value.
| County | Median Home Value | Median Annual Property Tax Payment | Average Effective Property Tax Rate |
|---|---|---|---|
| Aurora County | $86,600 | $1,244 | 1.44% |
| Beadle County | $120,900 | $1,630 | 1.35% |
| Bennett County | $100,000 | $1,421 | 1.42% |
| Bon Homme County | $89,000 | $1,400 | 1.57% |
| Brookings County | $187,100 | $2,427 | 1.30% |
| Brown County | $171,200 | $2,288 | 1.34% |
| Brule County | $157,500 | $1,483 | 0.94% |
| Buffalo County | $625 | ||
| Butte County | $153,000 | $1,820 | 1.19% |
| Campbell County | $63,500 | $1,172 | 1.85% |
| Charles Mix County | $127,900 | $1,436 | 1.12% |
| Clark County | $108,500 | $1,140 | 1.05% |
| Clay County | $168,100 | $2,491 | 1.48% |
| Codington County | $182,400 | $2,050 | 1.12% |
| Corson County | $55,600 | $746 | 1.34% |
| Custer County | $232,000 | $2,087 | 0.90% |
| Davison County | $153,600 | $2,010 | 1.31% |
| Day County | $110,600 | $1,431 | 1.29% |
| Deuel County | $120,300 | $1,394 | 1.16% |
| Dewey County | $65,900 | $950 | 1.44% |
| Douglas County | $84,100 | $1,205 | 1.43% |
| Edmunds County | $110,600 | $1,206 | 1.09% |
| Fall River County | $136,800 | $1,833 | 1.34% |
| Faulk County | $88,200 | $936 | 1.06% |
| Grant County | $136,200 | $1,314 | 0.96% |
| Gregory County | $97,300 | $1,293 | 1.33% |
| Haakon County | $116,200 | $989 | 0.85% |
| Hamlin County | $161,400 | $1,921 | 1.19% |
| Hand County | $120,100 | $1,139 | 0.95% |
| Hanson County | $139,900 | $1,445 | 1.03% |
| Harding County | $97,400 | $1,428 | 1.47% |
| Hughes County | $181,400 | $2,169 | 1.20% |
| Hutchinson County | $111,600 | $1,526 | 1.37% |
| Hyde County | $104,300 | $1,352 | 1.30% |
| Jackson County | $58,600 | $712 | 1.22% |
| Jerauld County | $74,200 | $945 | 1.27% |
| Jones County | $84,700 | $806 | 0.95% |
| Kingsbury County | $118,700 | $1,368 | 1.15% |
| Lake County | $170,300 | $2,060 | 1.21% |
| Lawrence County | $224,200 | $2,503 | 1.12% |
| Lincoln County | $240,200 | $3,557 | 1.48% |
| Lyman County | $109,600 | $1,080 | 0.99% |
| McCook County | $152,300 | $1,679 | 1.10% |
| McPherson County | $62,600 | $901 | 1.44% |
| Marshall County | $126,300 | $1,310 | 1.04% |
| Meade County | $207,700 | $2,529 | 1.22% |
| Mellette County | $817 | ||
| Miner County | $87,000 | $1,028 | 1.18% |
| Minnehaha County | $201,500 | $2,829 | 1.40% |
| Moody County | $152,700 | $1,861 | 1.22% |
| Pennington County | $197,200 | $2,661 | 1.35% |
| Perkins County | $100,700 | $1,289 | 1.28% |
| Potter County | $106,000 | $1,429 | 1.35% |
| Roberts County | $107,000 | $1,398 | 1.31% |
| Sanborn County | $106,700 | $1,298 | 1.22% |
| Spink County | $89,500 | $1,385 | 1.55% |
| Stanley County | $154,900 | $1,965 | 1.27% |
| Sully County | $130,800 | $1,236 | 0.94% |
| Todd County | $26,600 | $850 | 3.20% |
| Tripp County | $100,800 | $1,101 | 1.09% |
| Turner County | $137,500 | $1,597 | 1.16% |
| Union County | $206,300 | $2,586 | 1.25% |
| Walworth County | $96,700 | $1,615 | 1.67% |
| Yankton County | $152,800 | $1,873 | 1.23% |
| Ziebach County | $68,800 | $515 | 0.75% |
Eligibility Criteria
Homeowners residing in their principal residence in South Dakota are eligible for a property tax discount. To qualify, you must:
- Own and occupy the property as your primary residence.
- Apply for the owner-occupied status, which needs to be done only once.
- Maintain ownership and residency in the property to continue receiving the tax discount.
Benefits and Advantages
Understanding and leveraging property tax benefits can lead to significant savings. Key benefits include:
- Tax Discounts: Owner-occupied homes receive a lower tax rate, reducing annual tax obligations.
- Potential Savings: Properly assessing and disputing excessive property valuations can lead to lower taxes.
- Financial Planning: Accurate property tax calculations aid in better financial and investment planning.
- Legislative Support: Ongoing legislative efforts aim to stabilize and potentially reduce property tax rates.
How to Claim or Apply for Property Tax Benefits
Claiming property tax benefits in South Dakota involves several steps:
- Determine Your Property’s Assessed Value: Obtain the assessed value from your local tax assessor, reflecting your property’s market value.
- Understand Local Tax Rates: Identify the effective property tax rate for your specific area, which can vary by county, school district, and other local entities.
- Apply for Owner-Occupied Status: If your property is your principal residence, apply for the owner-occupied classification to receive a tax discount.
- Dispute Excessive Assessments: If you believe your property is over-assessed, submit an appeal to the local board of equalization by mid-March. Follow up with additional appeals if necessary.
- Consult a Tax Professional: For personalized assistance, consider contacting a tax advisor to navigate the application and appeal processes effectively.
Additional Requirements or Considerations
When managing your property taxes, keep the following considerations in mind:
- Annual Assessments: Property values are assessed yearly, so stay informed about any changes that may affect your tax rate.
- Exemptions and Deductions: Explore available exemptions or deductions that could lower your taxable amount.
- Legislative Changes: Stay updated on legislative actions that may impact property tax rates and regulations.
- Local Variations: Understand that tax rates and regulations can vary significantly between counties and municipalities.
- Consultation Services: Utilize professional tax services for accurate assessments and effective appeals.
Frequently Asked Questions (FAQs)
What is the average effective property tax rate in South Dakota compared to the national average?
In South Dakota, the average effective property tax rate stands at 1.08%, which is higher than the national average of 0.99%. This means that property owners in South Dakota face a slightly higher tax rate compared to the broader United States.
How can I calculate my property taxes in South Dakota based on my financial details?
Calculating your property taxes in South Dakota involves determining your property’s assessed value, understanding your local tax rates, and applying the effective tax rate. For a detailed step-by-step guide, refer to the ‘How to Calculate Your Property Taxes in South Dakota’ section in this article.
How do property tax rates in Pennington County compare to other counties in South Dakota?
Pennington County has a median effective property tax rate of 1.35%, with the average homeowner contributing approximately $2,661 annually. This rate is slightly above the state average, providing a snapshot of the taxation climate compared to other South Dakota counties.
Why does Lincoln County have the highest property taxes in South Dakota?
Lincoln County has the highest property taxes in South Dakota primarily because it boasts the state’s highest median home value of $240,200. Combined with an average effective property tax rate of 1.48%, these factors contribute to the substantial tax bills in the county.
How do South Dakota property tax rates compare to those in North Dakota?
South Dakota’s average effective property tax rate of 1.08% is higher than North Dakota’s 0.94%. This positions South Dakota’s rates above its northern neighbor, highlighting regional differences in property tax burdens.
How do property taxes in Union County compare to the state and national averages?
Union County has an effective property tax rate of 1.25%, which is slightly below South Dakota’s state average of 1.24%. However, due to incomplete national average data, a direct comparison to the national average isn’t possible. Nevertheless, Union County offers a competitive tax rate within the state.
Current Property Tax Rates and Trends
In 2024, property taxes in South Dakota continue to be a significant concern for residents, as they have risen substantially over the past decade. Here’s a detailed overview of the current property tax landscape in the state.
- Effective Property Tax Rate: The average effective property tax rate in South Dakota is approximately 1.08%, which is higher than the national average of 0.99%. Neighboring states like Nebraska and Iowa have higher rates of 1.73% and 1.57% respectively.
- Increase Over Time: Over the last decade, property tax payments have increased significantly:
- Homes: nearly 60%
- Commercial properties: about 47%
- Agricultural properties: around 28%
- Distribution of Tax Revenue: In 2023, South Dakotans paid over $1.6 billion in property taxes, allocated as follows:
- Schools: 56%
- Counties: 27%
- Cities: 13%
- Other local entities: remaining percentage
Legislative Actions and Future Considerations
A legislative committee has been formed to study rising property taxes and propose potential reforms during the upcoming session starting in January 2025. The committee aims to ensure a fair and equitable property tax system, addressing concerns raised by constituents about high tax burdens.
Factors Influencing Property Taxes
- Market Dynamics: Increased sale prices and substantial growth in areas like Sioux Falls and the Black Hills have led to higher property valuations, shifting more of the tax burden onto owner-occupied homes. Currently, these homes account for about 43% of total property taxes paid, up from 40% in 2014.
- Revenue Cap Regulations: Local governments can increase property tax collections by a maximum of 3% or the rate of inflation (whichever is lower), along with additional revenue from new growth. This cap aims to manage how much local authorities can raise through property taxes each year.
County-Specific Insights
Property tax rates vary significantly across counties in South Dakota. Below are insights into some key counties:
- Lincoln County: Median property taxes are approximately $3,102.
- Pennington County: Around $2,608.
- Minnehaha County: Approximately $2,594.
These variations reflect differences in local funding needs and market conditions.
Conclusion
Understanding how South Dakota property taxes work is essential for homeowners and prospective buyers. With an average effective tax rate of 1.08%, which is higher than the national average, staying informed about local rates, eligibility criteria, and legislative changes is crucial. By leveraging available resources and professional assistance, you can effectively manage your property tax obligations and make informed financial decisions.
For more detailed calculations and personalized assistance contacting a financial advisor.
anywhere 
anytime