SB 216 went further, and cited Proposition 13's case

Senator Hulse's bill opened with a legislative finding, which is unusual drafting and tells you what it was aiming at:

“The Legislature finds that the principles established in Nordlinger v. Hahn, 505 U.S. 1 (1992), affirm the constitutionality of basing property tax assessments on the purchase price of property rather than current market value, for the purpose of protecting homeowners from unexpected hikes and escalating real estate values impacting the reliance interests in their homes.”

The operative provision was an acquisition-value system: assessed value could not rise more than three percent annually from a 2026 base, and “[w]hen a change in ownership of an owner-occupied single-family dwelling occurs, the property must be reassessed at its fair market value, to determine the property's base amount.”

Deferred to the 41st day, 4-2.

Three constitutional amendments died the same fortnight

SJR 505, SJR 506 and SJR 507 would each have put a property tax limit to the voters. All three were killed in Senate committees between February 20 and 23, 2026. On SJR 505 and SJR 506 the committee first took a favourable vote and then reversed itself and killed the measure the same day.

SJR 506 was the most aggressive, writing an acquisition-value system into Article XI, section 2 of the state constitution — with a two-tier rate:

“For purposes of this section, ‘applicable percent’ means one percent if it is owned by a person who resided in this state for at least half of the year preceding the year in which the taxes are due, or two percent if it is owned by a person who does not reside in this state for at least half of the year preceding the year in which the taxes are due.”

One percent for residents, two percent for non-residents. That provision would have landed directly on second homes in Black Hills covenant communities. Whether an explicit residency-based rate differential survives equal-protection and dormant Commerce Clause review is genuinely unresolved — Nordlinger upheld acquisition-value assessment, which is a different question.

What survives instead

SDCL 10-6-158, enacted by the 2025 session, and its terms explain why the 2026 bills kept coming:

“For taxes payable in 2027, 2028, 2029, 2030, and 2031, the total assessed value of all property in a county with an owner-occupied single-family dwelling classification, as defined in § 10-13-39, may not increase more than three percent over the total assessed value of all property in the county with an owner-occupied single-family dwelling classification in the prior year.”²

Read that carefully: it caps the total assessed value of all property in a county. It is a countywide aggregate limit, not a per-parcel one. An individual home in a revaluing neighbourhood can still rise well past three percent while the county total stays inside the cap, because other properties rise less.

The section also permits a county to add the assessed value of new improvements and newly reclassified property on top, and requires adjustment under SDCL 10-6-121.

What this means where an association is involved

A condominium or townhome unit is inside the protected class. SDCL 10-13-39 defines the owner-occupied classification to include a house, a “condominium apartment,” residential housing of four or fewer family units, a “town house, town home, housing cooperatives where membership in the cooperative is strictly limited to stockholder occupants of the building,” and manufactured or mobile homes.

The association's own parcel is not. A clubhouse lot, a pool parcel or common open space held in the association's name carries no owner-occupied classification, so SDCL 10-6-158 does not reach it. Its assessment can move without that brake, and the increase arrives in the members' assessments rather than on their tax bills. No Department of Revenue guidance addresses association-owned parcels either way — this is reasoned from the classification text, not from a published position.

And none of it touches association dues. The fastest-growing housing cost line for many owners sits entirely outside the statute. Our assessment limits page covers what does constrain it, which is the declaration.

What to watch next

There is no property tax interim committee this cycle. The 2025 task force that generated the 2026 slate was not reconstituted, and the Executive Board's 2026 summer studies are Indian Medicaid managed care, developmental disability service delivery and emergency medical services funding. The 2027 session therefore opens without a pre-packaged homeowner tax agenda for the first time in two years.