By Trish Ladner
District 30 Representative
Homeowners are asking why did property valuations for tax purposes of owner-occupied single-family homes go up so much since 2019? I believe that you can attribute the skyrocketing valuations to a combination of several factors including: COVID-19, that created a high concern for personal values, safety and freedom prompting a massive migration of people fleeing from densely populated urban cities to move to rural states like South Dakota. Add into the mix, low interest rates at the time, and you could say that we experienced the “perfect storm.” A storm that has left us with unprecedented growth and long term residents trying to deal with massive double-digit increases in property valuation over the past few years.
Is this a statewide issue? Based on the Owner-occupied valuation reports from the South Dakota Department of Revenue, property valuations have risen by an average of 56.8% year-on-year across all counties since 2019. With 66 counties in South Dakota, the increases in property valuations varied, with all but two counties experiencing double-digit increases and two counties even reaching triple-digit increases. For example, Custer County’s valuations rose by 49.82%, Pennington County by 70.81%, and Fall River County by 80.07%. In East River, Lincoln County saw an 88.25% increase, Minnehaha County 59.61%, and Hughs County 43.72% (source: SD Department of Revenue annual reports on owner-occupied single-family homes, 2019-2023). This rapid property value increase isn’t sustainable for long-term South Dakota residents. The rise in valuations will more than likely lead to higher taxes and likely increased home insurance. We must act now!
We need to back up and reset our owner-occupied property valuations (for tax purposes). I am working with Senator Kolbeck and Representative Krull on a property valuation bill that would reset the valuation of owner-occupied single-family homes owned before 2020, to their 2020 valuations for tax purposes with a maximum increase of 3% per year going forward. This will also apply to the rancher or grower’s owner-occupied home on their homestead. No refunds. No rebates. Simply a reset to go forward. If you purchased your home in 2021, 2022 or 2023, your home would be valued at the purchase price (market value) and then capped at a maximum increase in valuation of 3% going forward. If you change the footprint of your home or add a building/barn, the property will be reassessed at that time, with the increase in valuation capped at a maximum increase of 3% going forward. I have been working on this bill for almost a year now. It’s a good bill and I have been told that it will slide nicely into the state’s current property tax law and are looking forward to publishing the bill soon.
By implementing this Property Valuation Relief legislation, we will:
• Protect the interests of long-term South Dakotans.
• Stabilize taxes and shields taxpayers from the possibility of future valuation increases due to soaring property values.
• Provide families with the assurance that their valuations, for property tax purposes, will not rise by more than 3% per year, even if the value of their home increases significantly.
How can you help? The next couple of weeks are going to be critical in garnering support for this legislation. Tell your property tax story by calling or e-mailing legislators across the state and ask your neighbors to do the same. Legislator’s contact information is on the LRC website under the legislator’s tab (https://sdlegislature.gov/Legislators). Come to Pierre and tell the Senate and House Committees on taxation your story in person. Personal stories carry a lot of influence.
Thank you for the honor of serving you in Pierre!