What is the property tax rate in South Dakota?
South Dakota’s property tax rate averages 1.00% of market value for owner-occupied homes (Tax Foundation 2026, using the 2024 American Community Survey).
Bills are figured from a levy stated in dollars per $1,000 of taxable value. The Department of Revenue explains that each taxing entity’s levy equals the unfunded part of its budget divided by the total taxable value in its area. Your bill is the sum of the county, city, school district and any other district levies, times your taxable value.
How South Dakota sets assessed and taxable value
Non-agricultural property, which includes every apartment building, is assessed at its market value, or full and true value: what it would probably sell for on the open market. Agricultural land is valued on productivity instead. Values are updated every year, and notices go out by March 1.
The tax then applies to 85% of value. The Department of Revenue’s example: a home with a full and true value of $230,000 has a taxable value of $195,500. If a county’s assessments are at 100% of market, its equalization factor is 0.85.
Property falls into three main classes: agricultural, owner-occupied, and other. The other class covers residential property the owner does not live in, commercial property and utilities.
Why South Dakota apartments pay the “other” class rate
An apartment building is taxed in the other class, and that class pays the highest school levy. For taxes payable in 2024, the statewide school general fund levies were $1.320 per $1,000 for agricultural property, $2.954 for owner-occupied property and $6.113 for other property, according to the Department of Revenue’s FY2024 statistical report.
Owner-occupied status is available for houses, condominiums, townhouses, duplexes, triplexes, fourplexes and manufactured homes where the owner lives, and the owner must file a certificate with the director of equalization by March 15. A five-unit or larger building with no owner-occupant stays in the other class.
The gap is large. In Sioux Falls, the total levy on other property was $17.960 per $1,000 against $14.327 for owner-occupied property, about 25% more for the same value.
Does a sale trigger reassessment in South Dakota?
South Dakota has no sale trigger, because there is no frozen base value to reset. Every non-agricultural parcel is assessed at market value each year, and sales of similar buildings are the main evidence assessors use.
In practice a sale at a price well above the current assessment tells the assessor something, and the next year’s notice may move toward the price. A buyer should underwrite taxes on something near the purchase price.
Limits on South Dakota property tax growth
South Dakota limits growth in what local governments collect, not in an apartment building’s value. Under the long-standing rule described in the Department of Revenue’s report, a local government may collect last year’s property taxes plus an increase for inflation, measured by the consumer price index and capped at 3%, plus taxes on new construction.
Senate Bill 216 (2025) added two temporary limits for five years: overall owner-occupied valuation in each county can grow no more than 3% a year, and local government property tax budgets are limited to 3% annual growth. The changes first showed up on 2026 assessment notices and apply to taxes paid in 2027.
The valuation cap covers only owner-occupied property. An apartment building’s value can still rise with the market, and if owner-occupied values are held back, a larger share of a capped budget can fall on other property.
Property tax rates in South Dakota’s major cities
Total levies on other property in larger South Dakota cities ranged from about $14.65 to $24.75 per $1,000 of taxable value for taxes payable in 2024. The Department of Revenue’s statistical report does not publish a county average levy, so the table uses its municipal totals (city, county, school and other levies combined) for 17 larger cities we checked. Where a city spans more than one school district or county, the figure is for its first-listed portion.
To turn a levy into a rate on market value, multiply by 0.85 and divide by 1,000. Sioux Falls at $17.960 works out to about 1.53% of market value. Of that $17.960, the Minnehaha County levy was $3.057; the school district and city levies make up most of the rest.
Mind the one-year lag. South Dakota values property in one year and collects the tax the next, so the 2023 values in this table produced the taxes paid in 2024, and a 2026 assessment notice drives the tax bill paid in 2027.
| City (county) | Total levy, other class (per $1,000) | Approx. rate on market value | Group |
|---|---|---|---|
| Vermillion (Clay) | $24.751 | 2.10% | Highest |
| Huron (Beadle) | $21.141 | 1.80% | Highest |
| Sioux Falls (Lincoln County portion) | $21.023 | 1.79% | Highest |
| Aberdeen (Brown) | $20.445 | 1.74% | Highest |
| Tea (Lincoln) | $20.218 | 1.72% | Highest |
| Sturgis (Meade) | $17.027 | 1.45% | Lowest |
| Rapid City (Pennington) | $16.288 | 1.38% | Lowest |
| Pierre (Hughes) | $15.349 | 1.30% | Lowest |
| Spearfish (Lawrence) | $14.952 | 1.27% | Lowest |
| Watertown (Codington) | $14.653 | 1.25% | Lowest |
How to appeal your property value in South Dakota
South Dakota’s appeal window opens in early March and the first deadline comes within two weeks. Most owners must start at the local board of equalization; nonresidents and owners in unorganized townships can go straight to the county board. Appeals cover the total value of the property, and a written appeal can be a letter, an email or a signed PT17 form.
- By March 1, 2026: assessment notices mailed.
- March 12, 2026: written appeal to the local board due (postmark counts); the board meets March 16 to 20.
- April 7, 2026: written appeal to the county auditor for the county board, or for a consolidated board; boards meet April 14 to May 5.
- May 15, 2026: appeal to the Office of Hearing Examiners in Pierre.
- Circuit court: within 30 days of the county board’s notice or of the Office of Hearing Examiners’ decision. You cannot pursue both at once.
Property tax relief and exemptions for South Dakota apartments
Most South Dakota relief programs require the owner to live in the property, so they do not reach a rental building. That includes owner-occupied classification, the 3% owner-occupied valuation cap, the assessment freeze for owners 65 and older or disabled, and the disabled veteran exemption.
Two 2026 laws follow the same line. Senate Bill 245 sends the revenue from the 0.3-point sales tax increase due July 1, 2027 to schools as state aid to lower the owner-occupied school levy, and adds a one-time payment so homeowners see a lower school levy on their 2027 tax bill. Senate Bill 96 lets counties add up to a 0.5% sales tax, starting no earlier than January 1, 2027, whose revenue funds a credit on owner-occupied homes. Tax increment financing districts include an affordable housing classification, which can matter for new apartment projects; ask the city whether a building sits in one.
Worked example: property tax on a $2M South Dakota apartment building
Take a 24-unit building in the Minnehaha County part of Sioux Falls with a full and true value of $2,000,000. Taxable value is $1,700,000 (85%). At the other-class levy of $17.960 per $1,000, the yearly tax is about $30,532, or 1.53% of value. The same building in Watertown at $14.653 would owe about $24,910, and in Vermillion at $24.751 about $42,077.
Now the sale. Suppose the assessor had the building at $1,600,000 before it sold for $2,000,000. Its taxable value was $1,360,000 and its Sioux Falls bill about $24,426. If the next assessment moves to the price, the bill rises to $30,532, an increase of $6,106 a year. At an illustrative 6.5% cap rate, that change is worth about $93,900 of value to a buyer.
| Scenario | Taxable value | Yearly tax |
|---|---|---|
| Sioux Falls (Minnehaha), $17.960 | $1,700,000 | $30,532 |
| Rapid City, $16.288 | $1,700,000 | $27,690 |
| Watertown, $14.653 | $1,700,000 | $24,910 |
| Vermillion, $24.751 | $1,700,000 | $42,077 |
| Before sale, valued at $1.6M (Sioux Falls) | $1,360,000 | $24,426 |
What to check on your South Dakota tax notice before you sell
Your assessment notice and tax statement already answer most of a buyer’s questions. Check them before you go to market, because the March appeal window closes early in the year.
- The full and true value on the notice, compared with what you think the building would sell for.
- The classification. A building of five or more units belongs in the other class, so confirm the notice shows the class you expect.
- The levy for each taxing district on the statement: county, city, school district and any special districts.
- Any tax increment financing district the parcel sits in.
- Special assessments for streets or utilities, which are billed separately from the levy.
How property tax affects your sale price
Buyers value apartment buildings on net operating income, so expected tax comes straight off value at the cap rate. In South Dakota, with annual market assessments, the difference between your bill and the buyer’s bill depends on how closely your assessment tracks the price.
If your assessment looks high against your rents and expenses, a March appeal is the cheapest way to lower the bill a buyer inherits. Bring rent rolls, operating statements and recent sales of similar buildings.
Selling an apartment building in South Dakota
Skyline buys apartment buildings with five or more units in South Dakota, from Sioux Falls and Rapid City to Aberdeen and Brookings. We buy directly, close on your timeline, and can work inside 1031 deadlines. We underwrite from your actual tax statements.
South Dakota has no income tax on the sale itself; see our page on South Dakota capital gains tax on real estate for the federal side. For the lease and deposit rules a buyer takes over, see South Dakota landlord-tenant law for apartment owners.
