This bill aims to limit annual valuation increases on owner-occupied single-family dwellings and nonagricultural property in South Dakota, ensuring that property tax assessments are based on the purchase price rather than current market value. The legislation emphasizes the need to protect homeowners from unexpected tax hikes due to rising real estate values, aligning with the principles established in the Supreme Court case Nordlinger v. Hahn. The bill amends existing law to require that property assessments be conducted annually, with specific provisions for owner-occupied properties that cap annual increases at three percent, starting from a defined base amount.

Key provisions include the establishment of a "base amount" for property valuation, which is determined based on the fair market value as of November 1, 2020, or the value at the time of ownership transfer, with annual increases limited to three percent. Additionally, the bill allows for reassessment upon a change in ownership and permits increases above the three percent cap in cases of property use changes or expansions. The legislation also clarifies that minor improvements resulting in a valuation increase of forty percent or less will not affect the assessed value limits.

Statutes affected:
Introduced, 02/03/2025: 10-6-105
Senate Taxation Engrossed, 02/21/2025: 10-6-105