The definition of Property Taxes is an ad valorem tax on all real estate property (land and improvements) that has been deemed taxable by the South Dakota Legislature. Ad valorem means “according to value” which is done by imposing a tax rate (levy) to the value of each taxpayer’s property. In Rapid City there are 57,000 total parcels of those 53,000 are taxable parcels. In real estate, a “parcel” refers to a specific, defined piece of land. In the last year there has been a 2.5% change in residential property assessed value, meaning people are building here in Rapid City.
Over 50% of your property taxes go to funding your local schools. This totals out to around 150 million in Rapid City. Funding for RCAS is split between the federal and local levels. This is where there is some divide between the West and the East side of the state. Here in Rapid City, we pay 55% whereas the federal only pays 25%. Whereas on the east side of the state the federal pays 70% and their local pay 25%. So, there is quite a divide in the legislature level between the West and East side of the state with how much local funding is going toward education.
How is the new property tax bill SD216 going to affect you. Long story short not at all. If you were hoping for no increase in your next year’s property taxes, you will be very disappointed. So, what does this bill do? The bill states that there will be a 3% cap on the annual increase due to the reappraisal of the total owner-occupied valuation of the county. This means it is the total of the county not the individual. It will limit the definition of new growth to a change in property value of 40% or more for new houses. The bill did however expand the qualifications for the elderly and disabled assessment freeze from:
Maximum income from $53,549 to $65,000
Maximum value of a home from $356,391 to $500,000.
Currently for Pennington County there are 507 properties using the elderly and disabled freeze totaling 507 properties that bring the total to $53.7 million exempt. Everyone outside of this freeze won’t feel much from this bill unfortunately. This bill will be sunset in 5 years.
