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limit annual valuation increases on owner-occupied single-family dwellings and nonagricultural property.

South Dakota property owners will get a cap on how much their annual property tax assessments can rise—limited to 3 percent per year for owner-occupied homes and non-agricultural property. However, this cap resets to fair market value if the property is sold, changes use, or gets a major addition or expansion (over 40 percent increase in value). This change makes property tax bills more predictable for homeowners, though it could affect county tax revenues.

create a new class of nonagricultural property for purposes of taxation, and to provide a penalty therefor.

South Dakota currently classifies property into two tax categories (agricultural and owner-occupied homes), but this bill creates a new "nonagricultural property" classification that splits commercial and investment properties into two subcategories based on who owns and operates them. The bill requires tax assessors to identify which nonagricultural category each property falls into when listing properties for taxation. This reorganization allows the state to potentially apply different tax rates or rules to commercial properties depending on whether they're investor-owned or owner-operated businesses.

adjust the assessment methodology for owner-occupied single-family dwellings and nonagricultural property.

HB 1253 changes how county assessors determine the fair market value of owner-occupied homes and non-agricultural property by requiring them to consider and document multiple valuation approaches (cost, market, and income methods) rather than using a single method. The bill also adds a new limitation on property assessments, though the bill text provided doesn't fully specify what that new limitation requires. These changes aim to create a more standardized and transparent assessment methodology across the state.

limit annual valuation increases on owner-occupied single-family dwellings and provide an exception for mill rate limitations on taxing districts.

This bill caps how much the assessed value of owner-occupied single-family homes can increase each year—limiting it to the state's inflation index factor—while allowing reassessment at fair market value when the home is sold. The cap starts with a baseline established for the 2025 assessment year and protects homeowners from steep annual property tax increases due to rising home values. The bill also ensures that this valuation limit doesn't shift the tax burden onto other property owners or agricultural land.

update provisions related to tax increment financing districts.

This bill updates tax increment financing (TIF) district rules by clarifying how newly constructed structures are valued for taxes and preventing counties from using discretionary assessment formulas for properties within TIF districts. The changes ensure that TIF districts operate under consistent valuation rules rather than allowing counties to reduce assessed values for new construction in those areas.

require the award of certain disbursements to prevailing owners and taxpayers in appeals of property classifications or assessments.

This bill changes the rules for who pays attorney fees when property owners challenge their property assessments in court. If a property owner wins their case or reduces their assessment by at least 20%, the court must now award them attorney fees and court costs, whereas currently the court only has the option to do so. Additionally, the bill requires courts to award these fees to the county when property owners lose their appeals, replacing the current discretionary standard.

limit annual valuation increases on owner-occupied single-family dwellings and provide an exception for mill rate limitations on taxing districts.

South Dakota homeowners will see a cap on how much their property tax assessments can increase each year—limited to 3% annually for owner-occupied single-family dwellings, with the increases calculated from a base value set in 2026. When a home is sold, it will be reassessed at current market value to establish a new base, but future increases are again capped at 3% per year. This change protects long-time homeowners from sharp tax jumps due to rising real estate values, similar to how some other states limit property tax growth.

eliminate the Agricultural Land Assessment Implementation and Oversight Advisory Task Force, and to provide that the Department of Revenue receive the submission of recommendations and provide a report on agricultural value.

South Dakota is eliminating the Agricultural Land Assessment Implementation and Oversight Advisory Task Force and shifting its duties to the Department of Revenue, which will now directly receive recommendations and report on agricultural land values instead of relying on a separate advisory committee. The Department of Revenue will continue to set rules for how agricultural land is valued, including procedures for determining income values based on eight-year crop data averages.

limit the annual increase in assessed value of each owner-occupied single-family dwelling.

Starting in 2027, South Dakota counties cannot increase the total assessed value of owner-occupied single-family homes by more than 3% per year, though they can add more if new improvements are made to those homes or if properties are newly classified as owner-occupied dwellings. This caps how much property tax assessments can rise annually for homeowners, even if the overall housing market appreciates significantly. The limit applies through 2031 and doesn't override other state law requirements for property value adjustments.

clarify when certification of values is transmitted to the county.

South Dakota's Department of Revenue must send property value certificates to county auditors by the fourth Monday of August, but if they miss that deadline, the law now clarifies that any assessment or tax based on those values remains valid as long as the certificate arrives within a reasonable timeframe. This change removes uncertainty about whether late-arriving certifications could invalidate property tax assessments.

clarify the eligibility of multiple garages or structures to be classified as owner-occupied.

This bill clarifies that multiple garages and structures on the same property as an owner-occupied home are part of that single residential classification for tax purposes, as long as they're recorded with the county assessor. The change ensures that owners aren't taxed separately on ancillary structures like detached garages or storage buildings that support their primary residence.

modify provisions for a tax increment financing district.

This bill modifies the rules for tax increment financing (TIF) districts, which are areas where local governments can redirect property tax increases toward development projects. The main change clarifies that counties' existing discretionary tax assessment formulas for new structures cannot be applied to properties located within TIF districts, ensuring TIF revenues are preserved for their intended development purposes.

proposing and submitting to the voters at the next general election an amendment to the Constitution of the State of South Dakota, limiting the assessed value of real property and limiting real property taxes.

This resolution asks South Dakota voters to approve a constitutional amendment that would change how real property is taxed and assessed. The amendment modifies language in the state constitution to allow the Legislature to limit assessed values of real property and impose caps on real property taxes, moving away from the current system where property tax valuations cannot exceed actual property value. If approved by voters, this would give the state more flexibility in controlling property tax rates and assessments.

proposing and submitting to the voters at the next general election an amendment to the Constitution of the State of South Dakota, resetting, then limiting property taxes to a flat rate, until adjusted when sold.

This joint resolution asks South Dakota voters to amend the state constitution to reset and freeze property tax rates at a flat amount, with those rates only increasing when a property is sold. The amendment changes the current system where property taxes are uniformly calculated based on assessed property values, replacing it instead with a fixed-rate model that stays the same until ownership changes.

modify requirements to create a tax increment financing district.

This bill modifies the rules for creating and operating tax increment financing (TIF) districts in South Dakota by updating definitions and requirements in state law. The changes affect how political subdivisions like cities and counties can establish these special districts, which use future property tax increases in a designated area to fund development projects. Key modifications include refined definitions of planning requirements, financing methods, and the process for creating and managing these districts.

modify the requirements for public notice of a hearing prior to a vote to impose an excess tax levy, and to modify requirements to refer an excess tax levy of a school district to a vote.

This bill requires South Dakota school districts to give property owners at least 21 days' notice before voting on an excess tax levy, with notices published in newspapers, on district websites, and mailed directly to property owners by the county. The notice must include the maximum tax increase amount, the standard levy limit, hearing details, the estimated tax impact per $100,000 of property value, and how the money will be used. School districts must reimburse counties for the costs of printing and mailing these notices to property owners.

repeal an exemption for certain health care facilities.

SB 161 removes a tax exemption that previously applied to certain health care facilities by repealing two sections of state law that provided special exemption rules. Going forward, health care facilities and charitable organizations will be taxed on any property they own that is used for non-charitable or non-health care purposes, just like other property owners are taxed.

authorize the creation of land banks.

South Dakota will allow local governments—counties, cities, school districts, and other tax-levying entities—to create nonprofit organizations called land banks to buy, manage, and rehabilitate abandoned, blighted, vacant, or tax-delinquent properties in their areas. Each land bank will be governed by a board of 5-11 members appointed through a process set by the local government that creates it. This is a new tool to help communities revitalize neglected properties and return them to productive use.

impose a transaction tax and dedicate revenues collected to supplant certain property taxes, and to provide a penalty therefor.

This bill creates a new transaction tax in South Dakota and uses the revenue collected to reduce property taxes on homes, farmland, and other property across the state. The tax revenues will first reduce property taxes on owner-occupied homes statewide, then on agricultural land if money remains, and finally on other property—all proportionally across counties. The bill requires county auditors to report current property tax amounts to the state so the Department of Revenue can distribute replacement funds fairly.