Property taxes in South Dakota are administered by local governments and are the primary source of revenue for funding counties, cities, municipalities, school districts, fire and sanitary sewer districts, and other local government units. Residential property taxes are based on the market value of the property, called the true and full value. Property taxes are assessed based on a millage rate, which is tax dollars per thousand dollars of property value.
According to theSouth Dakota Department of Revenue and Regulation, starting with assessments in 2010, for taxes payable in 2011, property taxes on agricultural land in South Dakota will be based on the land’s productivity value. The formula for determining the productivity value is gross revenue x landlord share percentage divided by the capitalization rate. The gross revenue is determined per county for cropland and non-cropland, based on data on actual production and commodity prices each year from the U.S. Department of Agriculture and the National Agricultural Statistics Services. The landlord share percentage is 35% for cropland and 100% for non-cropland. And the capitalization rate is 6.6%. For example, the assessed productivity value of 40 acres of cropland in a county with a gross revenue rate of $250 per acre would be $250 x 35% divided by 6.6% = $1,325.75 x 40 acres = $53,030.30.
There are property tax relief measures in South Dakota for senior citizens and homeowners who are disabled. This relief is in the form of a freeze on property tax assessments, property tax exemptions, municipal tax reductions, a homestead exemption, and a sales and property tax refund.
Freeze on assessments
South Dakota homeowners 65 or older, or disabled as defined by Social Security, could qualify for a freeze that prevents the value of the property from increasing for tax purposes. This freeze applies to the house, garage and lot, up to one acre. The current full and true value of the property must be less than $168,855.21 to qualify. And, the homeowner’s household income must be below a certain amount. The limits for 2010, based on 2009 income, are $24,599.44 for a single-member household and $30,749.30 for a multiple member household.
Property tax exemption
Disabled veterans in South Dakota and surviving spouses who have not remarried are exempt from property tax on up to $100,000 of the assessed value. Veterans who have lost, or lost the use of both legs could qualify for a property tax reduction. The reduction is a percentage, based on level of income, up to a maximum annual income of $8,000 for a single member household and $12,000 for a multiple-member household.
Municipal tax reduction
Homeowners 65 or older or disabled could also qualify for a reduction of their city property taxes. The income limit to qualify in 2010 is $5,757 for a single-member household and $7,764 for multiple-member households. The reduction of municipal property taxes is a percentage based on income level. This reduction is available in cities that have passed ordinances that allow the reduction in municipal property taxes.
The homestead exemption is a way for South Dakota homeowners age 70 or older, or surviving spouses to delay payment of property taxes until the property is sold. In the meantime the property taxes accrue an interest rate of 4% a year. To qualify for this postponement, you must have owned the house for at least three years or have been a resident of South Dakota for at least five years. The income limits based on 2009 income are $16,000 for a single-member household and $20,000 for a multiple-member household.
Sales and property tax refund
South Dakota homeowners 65 or older, or disabled, could qualify for an annual refund of sales or property taxes. Widows and widowers can also qualify, even if they don’t meet the age or disability requirement, provided the deceased spouse had received a property tax refund, the surviving spouse continues to live in the same home and has not remarried. The income limits for this refund for 2009 are $10,250 if you live alone and $13,250 for multiple-member households.
How to apply for the property tax relief
To take advantage of the property tax relief measures in South Dakota, you must apply for them. You can find the forms on the South Dakota Department of Revenue and Regulation website. Depending on the relief program you are applying for, you may need to attach a copy of your tax return, if you filed, or proof of your eligibility if you are disabled.
2010 Assessment Year Productivity Information – South Dakota Department of Revenue and Regulation
Agricultural Land Productivity Valuation – South Dakota Department of Revenue and Regulation
Property and Sales Tax Relief Programs – South Dakota Department of Revenue and Regulation
Property Tax Forms and Applications – South Dakota Department of Revenue and Regulation