PIERRE — South Dakota’s chief executive is unveiling a new initiative aimed at alleviating the property tax burden for homeowners.

Governor Larry Rhoden, alongside eight lawmakers from both the House and Senate, introduced a new “hog-house” bill that suggests multiple changes to the state's property tax framework during a news conference at the South Dakota State Capitol on Thursday.

The proposal includes a cap on annual property tax increases by cities and counties, limiting them to 3%, regardless of any higher assessments.

"I believe this is the first governor's bill that has been introduced in the last two or three years, and I'm proud to have this as a governor's bill, and I want to thank all of the legislators who participated in this great discussion," Rhoden commented.

Although other property tax bills are currently under consideration by the state Legislature, Rhoden stated that he would refrain from commenting on them and let the legislative process take its course.

What’s Included in Gov. Larry Rhoden’s Property Tax Bill?‍

Governor Rhoden, along with Lt. Gov. Tony Venhuizen and state legislators, gathered on Thursday, Feb. 13, 2025, at the South Dakota State Capitol Building in Pierre to announce the proposed property tax reforms.

The bill features several caps aimed at slowing property tax growth over the next five years. A key aspect of the plan is a 3% cap on county assessments for single-family homes. Additionally, individual taxing districts and school capital aid budgets would also face a 2% limit on increases due to new construction or capital growth.

However, renovations and home improvements carry an important exception in the legislation. New additions or upgrades will not be factored into county growth calculations unless the home's value increases by more than 40%.

"I thought that was another significant change to disallow those increases or those additions, the costs of additions to be counted as new construction," Rhoden explained. "Local government shouldn't need to grow just because a homeowner makes a small improvement."

Changes to the Property Tax Freeze Program

‍The state’s assessment freeze program, which benefits elderly and disabled homeowners, would also see adjustments under the proposed legislation. The income thresholds required to qualify for the freeze would rise to $55,000 (up from $35,000) for single-person households, and to $65,000 (from $45,000) for multi-member households.

Furthermore, the maximum eligible home value for the freeze would increase from $350,000 to $500,000.

This program allows qualifying homeowners to pay property taxes based on the assessed value of their home at the time they enter the freeze, even if the property’s value later rises.

Rising Property Tax Burden‍

South Dakota homeowners have faced rising property taxes in recent years. According to data from the state's Department of Revenue, property tax payments have surged over the past decade, with home taxes rising by nearly 60%, commercial property taxes climbing by 47%, and agricultural property taxes seeing a 27% increase between 2014 and 2023.

The proposed changes are an effort to curb these rising costs and provide relief to property owners.

Originally reported by Dominik Dausch in Argus Leader.