This bill aims to limit annual valuation increases on owner-occupied single-family dwellings in South Dakota, ensuring that property tax assessments are based on the purchase price rather than current market value. The legislation introduces a new definition of "base amount," which establishes that the assessed value of these properties cannot increase by more than three percent annually, starting from a specified base year. Additionally, it mandates that when ownership changes, the property must be reassessed at its fair market value, and the base amount cannot exceed the sales price. The bill also includes provisions to prevent the limitation on taxable value from causing tax increases on nonagricultural or agricultural properties within taxing districts.

Furthermore, the bill allows for increases in the base amount if there are changes in property use or classification, or if there are additions or expansions to the property. It specifies that such increases should only reflect the difference in value due to the changes made. Additionally, the bill provides a mechanism for taxing districts to impose a tax levy that exceeds the usual mill rate limitations, as long as the revenue does not surpass the amount collected in the 2025 tax year, adjusted for certain growth factors. This approach aims to balance the need for stable property taxes for homeowners while allowing taxing districts to manage their revenue effectively.

Statutes affected:
Introduced, 02/03/2025: 10-6-105
Senate Taxation Engrossed, 02/21/2025: 10-6-105
Senate Engrossed, 02/26/2025: 10-6-105
House State Affairs Engrossed, 03/06/2025: 10-6-105