South Dakota Assessment Freeze for the Elderly and Disabled

Quick Facts

• Purpose: Freezes the assessed value of your single-family home, mobile home, townhouse, or multi-unit building (up to four units) so that property taxes do not rise due to reassessment after you qualify.
• Eligibility snapshot: Applicants must be at least 65 or disabled, have owned and occupied the home for at least three full years, have income below the annually adjusted threshold ($39,357 for single, $52,476 for married in 2025), and the home’s full and true market value must be $344,000 or less.
• Effect on taxes: The assessed value remains fixed at the level when you first qualify, but taxes can still change if mill rates shift or if you add improvements. This is especially valuable in rapidly appreciating areas like Sioux Falls, Rapid City, and Black Hills communities.
• Ongoing obligations: Applicants must reapply annually to confirm income. Failure to file by April 1 removes the freeze and resets the assessment to current market value.

Program Overview

South Dakota’s assessment freeze program is codified in SDCL 10-6A. It functions similarly to a circuit breaker by stabilizing the taxable value of a home once a senior or disabled homeowner qualifies. Rapid population growth and tourism development have pushed property values higher across the state, particularly in Pennington, Lincoln, and Minnehaha counties. The freeze ensures longtime residents are not priced out of their homes due to reassessment spikes.

The program covers a variety of dwellings: single-family homes, manufactured homes on owned land, condos, and multi-unit properties of four units or fewer as long as the applicant occupies one unit as their principal residence. Agricultural land does not qualify, but farmhouses on agricultural property do.

Eligibility Requirements

To qualify you must:

1. Meet age or disability criteria: Be at least 65 by December 31 of the prior year or receive Social Security Disability benefits. Veterans with permanent total disability ratings also qualify.
2. Own and occupy the property for at least three years. Time spent in a nursing home or hospital counts as occupancy if you intend to return home and the property is not rented out.
3. Stay under income limits: Total household income for 2024 (used for 2025 applications) must be below $39,357 for single households or $52,476 for married. Income includes Social Security, pensions, wages, business earnings, and certain capital gains. The Department of Revenue updates limits each November.
4. Meet property value cap: The full and true market value of the home (as determined by the county assessor) must be $344,000 or less. This includes the dwelling and up to one acre of land.
5. File annually by April 1. Applications are submitted to the county treasurer or director of equalization. First-time applicants must include proof of age/disability and income documents.

Benefit Details

• Assessment freeze mechanics: Once approved, the assessed value is frozen at the prior year’s level. If you make improvements exceeding $30,000, the value of improvements may be added, but the underlying land value remains frozen.
• Tax bill impact: Because South Dakota property taxes are calculated by multiplying assessed value by mill levy, a frozen assessment prevents increases from revaluation. However, if voters approve new levies, taxes may still rise modestly.
• Portability: The freeze applies to the specific property. Selling or moving to a new home requires a new three-year occupancy period before requalifying.
• Loss of eligibility: If income exceeds limits or the property value surpasses $344,000 due to improvements or market growth, the freeze is removed the following year.

Application Process

1. Obtain Form PT38. Available at county treasurer offices or the Department of Revenue website. Request forms early in January.
2. Gather documentation: Collect federal tax returns, SSA-1099, pension statements, proof of property value (assessment notice), and evidence of ownership. For disability applicants, include SSA award letters or VA disability rating.
3. Complete the application. Provide property description, parcel number, years of residency, income details, and signatures. If married, both spouses must sign.
4. Submit by April 1. Deliver in person or by mail to the county treasurer or director of equalization. Keep a stamped copy.
5. Await confirmation. Counties send approval notices. Review tax bills to ensure the assessed value remains unchanged. If denied, appeal to the county board of equalization within 30 days.
6. Reapply annually. Each January, counties mail renewal forms requiring updated income information. Return promptly to maintain the freeze.

Documentation Checklist

• Completed Form PT38 with signatures
• Previous year’s federal income tax return or income affidavit
• SSA-1099, 1099-R, W-2, and other income documentation
• Proof of age (driver’s license, birth certificate) or disability letter
• Property assessment notice showing full and true value
• Deed, contract for deed, or title showing ownership
• Statement explaining temporary absences if applicable

Strategies for Maximizing Savings

1. Appeal value before freezing. If you believe the assessor overvalued your home, file an appeal in March. A lower baseline increases long-term savings once the assessment is frozen.
2. Limit major improvements. Significant renovations can raise assessed value. Plan projects carefully or spread them over multiple years to keep the frozen value manageable.
3. Coordinate with sales tax refunds. South Dakota offers a separate sales and property tax refund for seniors and disabled individuals with low incomes. File both applications to increase total relief.
4. Monitor income thresholds. If you expect income to exceed limits, consider deferring IRA withdrawals or using Qualified Charitable Distributions to reduce taxable income.
5. Leverage energy efficiency programs. Use the tax savings to improve insulation, weather stripping, and HVAC systems, reducing operating costs.

Example Scenarios

• Rapid City homeowner: Sarah, age 70, owns a home assessed at $320,000. After qualifying, her assessment remains locked even as neighbors see values climb to $360,000. She saves roughly $450 per year compared to unfrozen neighbors.
• Married couple in Sioux Falls: Mike and Ana, ages 68 and 66, earn $48,000 combined income. Their home value is $290,000. They freeze the assessment, protecting against future increases as the city grows.
• Disabled veteran in Pierre: James receives SSDI and VA disability. His home value is $210,000. By freezing the assessment, he stabilizes his tax bill and uses the savings to retrofit the home for accessibility.

Maintaining Eligibility

• Annual income reporting: Respond to renewal forms immediately. Missing the deadline removes the freeze, and you must wait another three years to requalify.
• Notify county of changes: Report sales, transfers, or rental arrangements within 30 days. Renting the property disqualifies you.
• Keep documentation: Maintain copies of approval letters, tax bills, and income proofs for five years in case of audit.
• Plan for heirs: The freeze ends upon your death unless a qualifying surviving spouse continues occupancy and meets requirements. Inform heirs about potential tax changes so they can budget for future assessments.

Additional Resources

• South Dakota Department of Revenue – Assessment Freeze
• County treasurer and director of equalization offices for local guidance
• South Dakota Senior Health Information and Insurance Education (SHIINE) for benefits counseling
• 211 Helpline Center for referrals to tax assistance and weatherization programs

Key Takeaways

The South Dakota assessment freeze is an essential safeguard for seniors and disabled homeowners confronting rapid property value growth. By applying on time, monitoring income, and coordinating with other relief programs, you can stabilize your tax bill and remain in your community with confidence.