Governor Larry Rhoden announced a new plan Monday, March 31, 2025 to help South Dakota homeowners pay less in property taxes.
The proposal would allow counties to add a small sales tax to offset lower property taxes.
“The people of South Dakota deserve a real property tax cut,” said Governor Rhoden at a press conference on March 31. “We’re not done yet.”
Called the Homeowner Tax Relief Program, the plan would give each county the choice to add a sales tax of up to 0.5 percent. All money from this tax would go directly to reduce property taxes for homeowners in that county.
The plan includes several key points:
-County commissioners would decide whether to add the sales tax
-Voters could request a public vote on the plan
-All money would go into a Property Tax Reduction Fund
-The funds would first reduce taxes for owner-occupied homes
-If all homeowner taxes are paid off, leftover money would help other property types
With this plan, homeowners in Pennington County who own a $325,000 home would save about $917 per year. In Minnehaha County, the same-value home would save $967 annually. This represents about 21-22 percent of the total tax bill for these homes.
“I wanted to take more of a rifle shot approach,” Rhoden emphasized. “We had over 20 pieces of legislation dealing with property tax relief. In my view, the problem with most of those bills is they were proposing a statewide solution to a five-county problem.”
The governor highlighted that this approach would capture tourism dollars to help local homeowners. “I wanted to make sure this was 100% property tax relief,” he emphasized. “I feel like we had a good session, you know, given the cards that we were dealt.”
Rhoden will present this proposal to the legislature’s Property Tax Relief Task Force, which was recently formed to study tax relief options. The governor has appointed Kirk Chaffee as his representative on the committee.
The plan comes after lawmakers passed Senate Bill 216 earlier this year, which Rhoden called a “stopgap” measure. This new proposal aims to provide more meaningful and long-term property tax relief.
“I’ve been in their shoes for 16 years,” Rhoden reflected about lawmakers. “You organize a task force, and you find yourself at a loss for coming up with a starting point. I think it was kind of a relief to some of the legislators that I talked to that they had something they could run with right off the bat.”
The task force will work on the proposal throughout the summer and fall, before the next legislative session.
