Ultimate South Dakota Real Property Tax Guide for 2024

Guide Overview

With this article, you will learn important knowledge about South Dakota property taxes and get a better understanding of things to consider when it is time to pay. Whether you are presently a resident, just contemplating taking up residence in South Dakota, or planning on investing in its property, find out how local property taxes work.

Average Property Tax Rate in South Dakota

Based on latest data from the US Census Bureau

South Dakota Property Taxes Range

South Dakota Property Taxes Range

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Based on latest data from the US Census Bureau

You May Be Charged an Unfair Property Tax Amount

Maybe you aren’t focused on your property bill containing a higher figure than is warranted by your property’s market worth. Not surprising though when presumed alike properties in locales are assigned the same fair market value based upon only a few — again presupposed — representative properties’ appraised values. Then take into consideration the inevitable assessor’s miscalculations. Even so there’s a way to protest the fairness of your tax levy and get it lowered in the event it’s in error.

If you have newly refinanced, watch out for unintended double assessments. With due diligence study your charges for all other possible disparities. Bill details are easily accessible on the web for everyone to see. Match your property’s assessed value against similar property in your community, while at the same time taking special note of new selling activity. In addition contemplate the likely significance of present-day market trends on home prices overall.

If you suspect there’s been an overstatement of your levy, don’t delay. If you don’t know whether an appeal is a waste of time or not, hand it to pros to weigh whether to protest. There are businesses able to protest assessments on your behalf without risk, no out-of-pocket expense. Additional particulars later.

What Is a Tax Protest Procedure?

When you have reason to suppose that your real property tax valuation is too high, you can always protest the assessment. Your appeal needs to be submitted in the county where the property is located.

Your county’s tax office and their website have the regulations, process, and filing forms that you have to have. Take your time reviewing all the regulations before you begin. If you leave out necessary details or forget a submission time limit, your appeal may be dismissed or sent back to you for completion.

Your tax notification will give you a time frame within which you can hand in your protest. If you don’t make that time period, you may give up your right to protest the appraisal.

It is critical that you receive a copy of the detailed assessment report from the county. Your case may rely on this. You will have a stronger likelihood of getting a reassessment of your real estate if errors were made in the valuation.

When you have a compelling protest, your request might be dealt with promptly using an informal procedure. Otherwise, you will be required to appear before a review board and present your case in detail. Your protest will hinge on demonstrating that your real property’s tax value is not accurate. Observations about property tax rates or how quickly property tax values have grown won’t help you with your appeal.

If you are not satisfied with the panel’s conclusion, you may appeal to a state board or panel. In the event you need to defend your position in the court, it may make sense to get service of one of the best property tax attorneys in South Dakota.

It is your right to protest your real estate tax value appraisal. However, the time it takes to go through an appeal may not be worthwhile if the value increase doesn’t increase your bill significantly. Carefully calculate your actual real property tax using any exemptions that you are qualified to use. Then ask yourself if the size of the increase justifies the work it will take to challenge the valuation.

How to Get Your Taxes Reduced for Free?

Sometimes consultants doing these appeals charge payment on a ”subject to” basis. You’ll pay an amount based upon any tax savings. In the case of zero savings, you don’t pay anything!

Incentivized to discover tax saving possibilities, real estate tax consultancy companies fully review your levy and are prepared for potential litigation. They’re very proactive on exemption issues, which have shown to be complex and sometimes result in court challenges.

Two conventional approaches for appraisal revisions are most often used to back up protests. They’re known as “sales comparisons” and “unequal appraisals”. Undertaken community-wide, sales comparisons establish market value based upon current sale prices while unequal appraisals uncover alike homes having inordinately high appraised values.

Smaller specialty companies that conduct complete reviews usually employ sales comparisons. Typically it’s a complete appraisal of the client’s real property. As a complete in-person review performed by an appraiser licensed by the state, its revisions are largely irrefutable. Only a complete review of the complete appraisal process could possibly reverse the specialty firm’s conclusions. Imagine three comparable properties sold for $500K, while the re-evaluated home requires a $10,000 reshingling, then its re-evaluation falls to $490K.

The unequal appraisal practice is used to expose opportunities for tax decreases even if estimated values don’t exceed current market values. By community, a listing of properties that are about equal in appraised market worth is produced via an automated process. These candidates’ tax bills are then contrasted. Many times a resulting tax bill disparities that’s 10% or more over the sampling’s median level will be reviewed. They customarily invoice clients based on a percentage of any tax savings rather than fixed, out-of-pocket fee.

Select a company that suits you in this directory of the best property tax protest companies in South Dakota.

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How Does South Dakota Real Estate Tax Work?

South Dakota law gives several thousand local governmental districts the power to levy real estate taxes. Yet property owners most often pay just one consolidated tax bill from the county. Then payments are paid out to these taxing entities based on a predetermined plan. There are three vital stages in taxing real estate, i.e., devising mill rates, estimating property values, and collecting tax revenues.

Under state law, the government of your city, public colleges, and thousands of other special districts are given authority to evaluate real property market value, establish tax rates, and assess the tax. They are legal governmental units administered by officers either appointed or voted in. They work in a discrete locale such as within city limits or special purpose units including watershed zones, water treatment stations, and police districts.

The state’s laws must be adhered to in the city’s handling of taxation. Taxation of properties must: [1] be equal and uniform, [2] be based on present market worth, [3] have a single appraised value, and [4] be held taxable unless specially exempted. Appropriate communication of any rate hike is also a requisite.

While maintaining statutory restraints mandated by statute, the city establishes tax levies. Left to the county, however, are appraising property, sending out bills, making collections, carrying out compliance, and dealing with disagreements.

The present-day market value of real property situated within your city is estimated by county assessors. Once again, the South Dakota Constitution sets directives concerning appraisal techniques. These instructions are designed to boost consistency across the state. Here, possibly misapplied appraising techniques and human error are often productive issues for appeals.

Within the U.S., three methods for setting real estate worth dominate (with additional slight differences). A Sales Comparison approach is established by comparing a property with like properties sold during the last few months in the same community. The Income Method weighs how much rental cash flow possibly would be generated from income-producing property. A Cost Approach as well is mainly a commercial real estate value computation method which adds the land value to the expense of replacing the building.

Usually once per three years or more often a county assessor reviews and decides whether to reset property’s estimated market value. That value is multiplied times a combined tax levy, i.e. the sum of rates set by all associated public districts. Those entities include your city, county, districts and special purpose units that produce that combined tax levy.

Who and How Determines South Dakota Property Tax Rates?

South Dakota constitutional regulations require uniform real estate market values be set by in-state counties. Any revenue impact of that estimate cannot be a determinant in this calculation.

South Dakota laws require new real estate assessments on a recurring basis. Most often, appraisers lump together all like properties located in the same community and collectively apply the same assessment methodologies. Without individual home tours and notice of your property’s particularities, such as significant water damage, those tax cutting opportunities could be overlooked.

In the beginning, when new properties were constructed, assessors amassed descriptive tax rolls. This roll depicts by address all properties within a specific locale. Properties were categorized based upon various characteristics e.g. size, use, and construction type. Property age and place were also factors enabling appraisers to group units and collectively affix estimated market values. At present, without another visit, utilizing often old, possibly inaccurate information — with only recent property sales figures being updated — assessors must rely upon those collectively attached estimated market values.

Dictated by South Dakota law, this operation is supposed to allocate the tax burden in an even way statewide with equitable property tax rates. By reason of this en masse approach, it’s not only probable but also certain that some market worth evaluations are inaccurate. Reasons for protest lie in wait here!

With a total appraised taxable market worth recorded, a city’s budget office can now calculate needed tax rates. When summed up, the property tax load all taxpayers bear is recorded. This is largely a budgetary function with unit administrators first planning for annual spending expectations. Then they determine the tax rates sufficient to cover those budgeted expenses. In principle, tax amount should equal the amount of all yearly funding.
Counties, cities, school districts, special purpose districts, like water treatment stations et al, make up hundreds such public entities in the state. They all calculate their own tax levies depending on fiscal marks. Under a consolidated tax bill, almost all sub-county entities contract for your county to levy and collect the tax on their behalf.

Both routinely arranged and previously unscheduled public hearings usually play a prominent role in this budgetary routine. Keep in mind that under state law, taxpayers can call for a vote on proposed tax hikes that exceed established limits.

In establishing its tax rate, the city must observe the state Constitution. Tax rates are prohibited from being raised before notifying the public. Then a public hearing on any proposed increase should be conducted before it occurs.

If South Dakota property taxes are too costly for your wallet causing delinquent property tax payments, you can take a quick property tax loan from lenders in South Dakota to save your property from a looming foreclosure.

What Are South Dakota Real Estate Taxes Used For?

Money from property tax payments is the lynchpin of local community budgets. They’re a revenue pillar for governmental services funding cities, schools, and special districts, including sewage treatment stations, public safety services, recreation etc.

These are some of the governmental services nearly all local governments customarily offer. Again, real property taxes are the single largest way your city pays for them, including more than half of all public school funding. Not just for the county and cities but also down to special-purpose districts as well, like sewage treatment plants and athletic parks, with all reliant on the real property tax.

A major piece of real estate tax payments goes toward district schools. Another big chunk is reserved for municipal and other governmental employees’ wages and benefits. Maintaining the police is yet another frequently discussed topic in the public safety arena. Street construction and maintenance, streetlights, sidewalks, and mass transit — all depend on property taxes. Another expense is water and sewage treatment facilities, followed by trash removal. Parks, recreational trails, playgrounds, and other recreation preserves are built and maintained within the community. Given all this, it’s no wonder why tax bills are seen as so high.

How Are Property Taxes Handled at Closing in South Dakota?

Real estate tax payments are typically paid beforehand for the whole year. Then who pays property taxes at closing while buying a house in South Dakota? Real estate ownership shifts from the seller to the new owner on closing. Purchasers are now obligated to pay the tax. From that point, purchasers reimburse sellers on a pro-rata basis.

Generally, this is not a proportional tax remittance paid straight-through to sellers, however. Instead, the mortgage holder, closing attorney, or escrow agent includes that refundable tax with other purchaser financial obligations at closing.