Property tax relief in South Dakota: the owner-occupied levy, the freeze, the refund and the veteran exemption

A South Dakota homeowner’s property tax is the county director of equalization’s full and true value, taken at 85% to get taxable value, times the levies of every district the home sits in, in dollars per $1,000. Only one of those levies depends on the owner: the school district general fund levy, which for taxes payable in 2026 is $2.518 per $1,000 on an owner-occupied single-family dwelling and $5.211 on everything else that is not farmland, and which for taxes payable in 2027 becomes $0.669 and $4.867 under HB 1051. A homeowner gets the lower rate by filing one form with the county director of equalization by March 15. On a $325,000 home that single application is worth about $744 on the 2026 bill and about $1,160 on the 2027 bill. Everything else on this page is smaller and age- or disability-tested; this one is for every owner who lives in the house.

The relief programs sit on top of that, and they are run by three different offices. The county director of equalization handles the owner-occupied classification and the veteran exemptions. The county treasurer handles the assessment freeze, the age-70 homestead deferral and the Rapid City municipal reduction. The Department of Revenue in Pierre handles the Sales and Property Tax Refund. Each one is applied for separately, several of them every year.

How the bill is built

The director of equalization sets full and true value, meaning market value, as of November 1 of the year before the assessment year, and mails assessment notices by March 1. An owner who disagrees appeals to the local board of equalization by mid-March, then to the county board. The Department of Revenue equalizes the roll so that taxable value is 85% of full and true value: a home valued at $230,000 is taxed on $195,500. Over the summer and fall each taxing district adopts its budget and the county auditor computes the levies by November 1. Bills go out in December or January, are payable January 1, and are not delinquent if half is paid by April 30 and the other half by October 31.

Two state laws now sit between the market and the bill. SB 216 (2025) caps the growth of the countywide total assessed value of owner-occupied single-family homes at 3% a year, plus new construction and reclassified property, for taxes payable 2027 through 2031; it also holds each taxing district’s property tax revenue growth to the lesser of 3% or an inflation index, with exceptions for bonds and judgments. Both limits are temporary, and the Department notes that the 2026 assessment notices were the first to reflect them. The cap is countywide, not per parcel: a particular home’s value can still rise more than 3% in a year if others rose less. And SB 245 (2026) with HB 1051 cut the owner-occupied school levy, described below.

The owner-occupied classification: file once, by March 15

The owner-occupied single-family dwelling classification is the lower school general fund levy, and it is the only place in the system where the county records that the owner lives in the house. Any owner who occupies the home as a primary residence qualifies. The form goes to the county director of equalization by March 15, can be submitted electronically through the Department’s website, and does not have to be refiled while the same owner occupies the same home. An individual may hold only one owner-occupied classification in the state, so a second home or a cabin is taxed at the “other” rate, and commercial owners are not eligible. SB 154 (2026) clarified when an additional garage or outbuilding is part of the classified dwelling (verify details).

The county, city, special education and other levies are the same for every class and are not shown. A district may set its general fund levies below the maximums, but must keep the three rates in proportion.

The 2027 cut is paid for by SB 245’s homeowner property tax reduction fund, administered by the Department of Revenue: $55,896,576 moved into it on July 1, 2026 for the 2027 bills, and from August 1, 2027 it receives revenue equal to 0.3 percentage points of the state sales, use and related taxes, the share that returns when the state rate goes from 4.2% back to 4.5%. From 2027 a county may also adopt a sales tax of up to 0.5% under SB 96, with all of it credited against the county portion of owner-occupied bills. Neither reaches a home that is not classified owner-occupied.

The assessment freeze: 65 or disabled, apply every year by April 1

The Assessment Freeze for the Elderly and Disabled holds the full and true value of the home where it is while the owner qualifies. The market can rise; the value the levies are applied to does not. The frozen property is the house, the garage and the lot, or one acre, whichever is less.

To qualify for 2026 the owner must be 65 or older, or disabled under the Social Security Act definition; must own and occupy an owner-occupied single-family dwelling; must have been a South Dakota resident, owning such a home, for five years, unless on the freeze the prior year; must have lived in the house at least 200 days of the previous calendar year; must have household income below $56,595 if living alone or $66,885 if two or more people are in the household; and the home must be worth less than $514,500, unless the freeze was already granted in an earlier year. Income is federal adjusted gross income plus any other income, including Social Security payments, for everyone in the household. An unremarried surviving spouse may qualify. The application, form PT 38, goes to the county treasurer by April 1 every year; forms are available in January.

The limits are new. SB 216 (2025) raised them from $35,000 single, $45,000 household and $300,000 of value to $55,000, $65,000 and $500,000, and indexes all three every January 1, starting in 2026, by the greater of the change in the consumer price index for urban wage earners or the Social Security cost-of-living increase. The $56,595, $66,885 and $514,500 figures are the first indexed set; the 2027 figures are to come in January. About 4,600 households were on the freeze for the 2024 assessment year, under the old limits; the new ones will admit many more.

The Sales and Property Tax Refund: 65 or disabled, low income, May 1 to July 1

This is the one program filed with the state rather than the county. For 2025 taxes, claimed in 2026, a person who was a South Dakota resident for all of 2025, and was 65 on or before January 1, 2025 or disabled at any time during 2025, with 2025 income of $17,215 or less living alone or $23,265 or less for the household, could apply between May 1 and July 1, 2026 to the Department of Revenue’s Tax Refund Office, 445 East Capitol Avenue, Pierre, SD 57501-3185, or online. Refund checks start in early September. The refund is a portion of the sales tax paid in the prior year, or, for a homeowner, a portion of the property tax on the home, figured on a sliding scale by income (verify the current schedule; the property tax refund has run up to 35% for a single person and 55% for a household). A renter claims the sales tax refund. Homeowners must have owned the home for three years, or for less than three years with five years of South Dakota residency. Approval is required every year, and the Department mails applications to the prior year’s recipients. The 2027 limits are to come; HB 1193 (2026) adjusted the refund rules for disabled veterans and surviving spouses (verify details).

The homestead deferral: 70 or older, April 1

The Property Tax Homestead Exemption is a deferral, not a reduction. A homeowner 70 or older, or a surviving spouse, with income and residency under the program’s limits (the Department’s September 2025 figures were income under $17,949 for a single-member household and $22,436 for a household (verify 2026 figures)) may delay paying the property tax until the home is sold or transferred. The deferred tax remains a lien on the property and accrues interest, shown as 4% in the Department’s 2025 presentation (verify), and must be paid in full before the property changes hands. A participant is not eligible for the Sales and Property Tax Refund. Apply by April 1 with the county treasurer, form PT 38C.

Veterans and paraplegics

Disabled veterans. A home owned and occupied by a veteran rated permanently and totally disabled from a service-connected disability, or by the veteran’s unremarried surviving spouse, is exempt on the first $200,000 of its full and true value. Apply by November 1 with the county director of equalization, form PT 46C. About 3,400 homes carried the exemption for the 2024 assessment year. On a $325,000 home the exemption removes $200,000 of value, so the home is taxed on the remaining $125,000, or $106,250 of taxable value at 85%.

Paraplegic veterans. A home owned by a paraplegic veteran, a veteran who has lost the use of both lower extremities, or the unremarried surviving spouse, and specifically designed for wheelchair use inside, is exempt from all property tax. Apply by November 1 with the county director of equalization, form PT 46A.

Paraplegics who are not veterans. The same kind of wheelchair-adapted home, owned or occupied by a paraplegic or a person who has lost the use of both legs, gets a reduction on a graduated scale by income (the Department’s 2025 limits were under $20,192 single and $24,679 household (verify 2026 figures)). Apply by April 1 with the county auditor, form PT 46B.

Rapid City only. A municipal property tax reduction for owners 65 or older or disabled, with income limits, exists where a city has adopted it by ordinance; the Department lists Rapid City as the only one. Apply by April 1 with the county treasurer, form PT 38A.

Income figures are the 2026 program year’s. The freeze and refund limits are indexed and the 2027 figures are to come.