A candidate for the Republican nomination for governor of South Dakota is proposing a two-year waiver on property taxes for first-time homebuyers plus a $400 annual property tax credit to all other homeowners.
South Dakota Searchlight reports Dusty Johnson, who is completing his final term in the US House of Representatives, said his proposal would be financed with $110 million in estimated annual revenue when the state sales tax rate reverts to 4.5% after June 30, 2027 – the tax was reduced in 2023 to 4.2% in 2023.
Johnson’s campaign identified about 260,000 homeowner-occupied parcels in South Dakota, which means having a $400 credit for each come will cost about $104 million. The campaign also noted there are roughly 1,500 first-time homeowners every year paying an average of $2,000 in property taxes, resulting in $6 million for their first two years of homeownership.
“It’s important that the relief is fiscally responsible,” Johnson said. “There are a lot of plans out there. There are a lot of people promising the moon, but they can’t actually make the math work.”
Homeowners’ property tax payments in South Dakota soared by roughly nearly 40% from 2020 to 2024. Johnson observed, “Property taxes have become a problem for every South Dakota homeowner, and I feel duty-bound to provide relief to all of them.”
However, one of Johnson’s rivals for the nomination, State House Speaker Jon Hansen, claimed Johnson stole the sales tax idea from a property tax relief task force that he served on last summer.
“Dusty Johnson can try to take credit for others’ plans all day, but the reality is he didn’t do the work to create this plan,” Hansen said in a statement. “This proposal was adopted by the property tax task force this summer, which I created and helped lead. Over two months ago I announced this proposal as just one aspect of a larger plan to significantly reduce property taxes. A vote on this plan is already coming this legislative session.”
Another Republican candidate for governor, Aberdeen businessman Toby Doeden, rejected Johnson’s plan and advocated eliminating property taxes while creating a state Department of Government Efficiency that would create a “more fair and equitable” system of raising revenue.
Republican Gov. Larry Rhoden, who is serving the remainder of former Gov. Kristi Noem’s term, proposed allowing counties to enact an optional half-percent sales tax that could be used to reduce the county portion of owner-occupied property taxes.
“A blanket statewide sales tax increase delivers less relief for the South Dakota communities who need it most,” Rhoden said. “My plan empowers voters in each county to make their own decisions, and to deliver a bigger property tax cut for homeowners if they choose.”
