Makenzie Huber, South Dakota Searchlight
Property taxes eat away larger and larger slices of 71-year-old Shirley Schumacher’s fixed income each year.
She has lived in the same 900-square-foot home in the southwestern South Dakota community of Oral since she moved there in 1999. She’s watched her annual taxes increase 641% from $129.02 to $956.40, according to the Fall River County auditor.
Her Social Security and pension benefits can’t keep pace.
“The price of everything is going up,” Schumacher said. “Our assessed value and property taxes go up. So does our insurance.”
South Dakota offers a property tax relief program to elderly and disabled residents. But Schumacher said she was denied when she applied for the program a few years ago. Officially, she was told her income barely exceeded income eligibility, but she believes she filled the form out incorrectly.
She hopes an expansion of the program approved by the Legislature this year will make it easier for seniors like her to qualify, and allow more older South Dakotans to remain in their homes.
Governor’s property tax law includes assessment freeze expansion
The program allows South Dakotans who meet qualifications including income and home valuation limits to freeze their home’s assessed value to the year they turned 65 or the year they became disabled. Participants apply yearly to the program.
The local property tax rate is applied to a home’s assessed value, so if the value doesn’t go up, it holds the person’s property taxes in check.
The state approved 4,705 elderly and disabled property tax assessment freeze applications in 2024, according to a records request fulfilled by the state Department of Revenue. The program reduced those properties’ assessed values by a collective $333 million.
There were 327 people denied for exceeding income limits, assessed value limits or for another reason, such as incorrect paperwork.
Gov. Larry Rhoden signed a bill into law this month that will expand eligibility in two ways. It will raise the limit on a home’s assessed value from $300,000 to $500,000 and increase the program’s income limit by $20,000 — from $35,000 to $55,000 for a single person, and from $45,000 to $65,000 for a multi-person household.
Both limits will increase yearly by inflation or the annual percentage change in federal Social Security payments, whichever is greater. Eligible residents must have owned a home in South Dakota for at least five years and lived in the state for more than six months of the previous year.
The program shifts some property taxes onto other property tax payers, according to Bobi Adams, a spokeswoman with the state Department of Revenue. That impact is “minimal,” she said, though it varies for each taxing district.
The proposal to expand eligibility for assessment freezes came as part of a property tax relief package with other provisions including a 3% cap on growth in countywide owner-occupied home valuations for five years.
Schumacher rushed to print out her new application for the program before the annual April 1 deadline, hoping to qualify this time.
If her application is accepted, it would freeze her home’s assessed value to the year she turned 65, which was 2019. That would bring her home’s assessed value down from $104,700 to $58,070, according to the Fall River County Equalization Office.
According to information from the county auditor, Schumacher would save $394.38 on her taxes this year through the program.
“That money back would give me just a little bit more flexibility to meet basic needs,” Schumacher said. “This is just subsistence right now.”
Schumacher said she canceled her online subscriptions years ago because she could no longer afford them, started raising rabbits for food because she can’t afford beef, and canceled her garbage pickup. She brings her trash to a friend for collection and burns her paper garbage.
Demand for targeted relief grows statewide
A 2024 AARP survey found that 75% of adults aged 50 and older prefer to stay in their homes as they age. Aging in place allows older people to maintain independence for as long as possible, stay in familiar surroundings, maintain relationships with friends, family and neighbors, and reduce the costs of long-term care.
Participants in South Dakota’s assessment freeze program can continue to use it when their valuations increase beyond the new $500,000 limit, if they’ve received assessment freezes before.
According to data from the state Department of Revenue, assessment freeze applications in Minnehaha County nearly doubled from 427 in 2021 to 849 in 2024. Statewide, applications grew by 1,485 during the same timeframe.
Auditors across the state said they’ve been raising awareness about the program in recent years, though the program is still underutilized in some areas.
Although fewer than 5,000 households are enrolled in the freeze program statewide, about 23,000 households are eligible, according to the Governor’s Office. An estimated 11,000 additional households will be eligible under the expansion.
There were no approved applicants in 2024 in Buffalo, Oglala Lakota or Ziebach counties. Only one or two applicants were approved in Corson, Jones and Mellette counties.
Older people have visited Minnehaha County Treasurer Kris Swanson’s office “shaken” by property tax increases in recent years, as home valuations increased in the Sioux Falls area.
Swanson helps them fill out applications, even if it’s unlikely they’re eligible for the program.
“As an older person, if I had to leave my home because I can’t afford to pay my taxes, I think that’d be heartbreaking,” Swanson said. “You leave something you’ve always known and worked so hard for in your life and you’re forced out. I don’t like that.”
Some cities offer expanded relief
If Schumacher lived in Sioux Falls or Rapid City, she’d also be eligible for a property tax refund program through the city.
Sioux Falls refunds residents up to an additional $500 if they participate in the state assessment freeze program, and Rapid City offers a similar program. The South Dakota Municipal League isn’t aware of any other municipal property tax refund programs in the state.
Sioux Falls started its program in 2022, renewing it each year as part of the city’s budget, said Shawn Pritchett, the city’s director of finance, innovation and technology. Nearly 675 households participated in the program in 2024, costing the city $232,000 to provide an average refund of $345.