Rhoden releases Homeowner Tax Relief Proposal

April 3, 2025:

Some South Dakota home owners might get a bit of a break on their property taxes if a plan introduced by Governor Larry Rhoden is put into action.

Rhoden said his Homeowner Tax Relief Proposal– released this week (March 31, 2025)— would give counties the opportunity to provide owner occupied tax relief for their residents and replace that revenue with another source.

Rhoden says property taxes include various local mill levies, but his proposal starts with the counties.

Rhoden says the Homeowner Tax Relief Proposal would be referrable to a public vote in each county, and it would shift a portion of the county tax burden to out-of-state visitors. He will present this proposal to the legislature’s Property Tax Relief Task Force. That group must report its recommendations and any proposed legislation to the Executive Board of the Legislative Research Council, on or before December 1, 2025.

Homeowner Tax Relief Proposal would be implemented in the following ways:

• Each county commission would have the option to directly reduce owner-occupied (homeowner) property taxes by replacing the revenue with a county sales tax of up to 0.5%;

• The funds raised from the optional sales tax would be placed into a Property Tax Reduction Fund at the county level;

• The use of the optional sales tax would be 100% dedicated towards directly lowering the county property taxes for all homeowners within the county;

• The property tax reduction would be achieved through a Homeowner Tax Credit, which would be paid out from the Property Tax Reduction Fund; and

• If owner-occupied property taxes in the county are fully offset by the Homeowner Tax Credit, any remaining funds in the Property Tax Reduction Fund must be used to lower property taxes among the other two classes of property: agriculture and other/commercial.

March 13, 2025:

Governor Larry Rhoden has signed his bill that attempts to address the rising cost of property taxes on South Dakota homeowners.

Rhoden said Senate Bill 216 is “impactful and workable, and it will certainly slow down any future tax increases.”

SB 216 addresses the property tax burden on homeowners in the following ways:

• Limits the increase in owner-occupied assessments to 3% countywide for the next 5 tax years;
• Sets a 3% cap on the amount taxing districts and school capital outlay budgets can increase as a result of new construction – local government budgets don’t need to grow just because a homeowner makes a small improvement to their property; and
• Increases the maximum income limits for the assessment freeze program to $55,000 for single member homes and $65,000 for multi-member homes – the bill also increases the maximum eligible home value to $500,000.

Rhoden said, “This bill was an important step forward, but we are not done bringing property tax relief to South Dakotans.” He said he’s working on a proposal for a real property tax cut and will share more details about that proposal “in the near future.”

Rhoden has signed 126 bills and VETOED one this legislative session.