SIOUX FALLS, S.D. (KELO) — It’s the time of year the mailbox is filled with incoming tax documents.
Last year many homeowners across the state were shocked to open their property tax assessments. In 2022, the average increase was more than 18 percent in Minnehaha County, a complete anomaly from the steady increases homeowners have experienced for decades.
Now this spring, many homeowners are opening yet another shocking assessment.
“My husband and I built this place in 1992,” Minnehaha County homeowner Julie Leisinger said.
For 30 years, Julie Leisinger has been a meticulous record keeper.
“I’ve got the property assessments cards going clear back to 1999,” Leisinger said.
In all that time, their home value followed a predictable trend.
“Steady increase over the years, never any kind of an insane spike,” Leisinger said.
That continued until 2021, when their home was assessed at nearly $258,000, then last year their assessment rose 35 percent to nearly $347,000. This year’s assessment came in at another 45 percent increase.
“It is now assessing at $504,000 dollars, that’s $246,000 they’ve increased; that’s almost double in two years,” Leisinger said.
“I thought last year would be the peak and it wasn’t,” Minnehaha County Director of Equalization Chris Lilla said.
Lilla says inflation played a big role in raising assessments this year. The average is nearly 15 percent, which is a little less than last year’s 18.8 percent, but certain neighborhoods are seeing a much greater impact.
“Here’s one that’s 32, 38, 31 percent, ” Lilla said. “In one eastside neighborhood we went up almost 30 percent last year and required another 30 percent this year, they’re just selling for that high of prices.”
The assessments are based on comparable home sales in your neighborhood.
“People need to look around them and the sales around them and say if I was to sell my house today, would I get that or more for my property,” Lilla said.
“I can’t sell it for that amount,” Lilla said.
But some homeowners like Leisinger believe their assessments are coming in above market value based on the specifics of her home.
“They said, well this property sold for over $500,000. I said it sure did, it has more land, it’s fully renovated, beautiful home inside and has six parking stalls,” Leisinger said.
“Garage stalls, that’s huge,” The Experience Realitor Amy Hix said. “If you have zero updates, you’re not going to be worth what somebody with the granite, stone and updated flooring.”
Realtors say all of those details are important when making comparison to recent home sales in your neighborhood, but right now, when those homes sold is also a factor.
“I think last summer was just a little bubble,” Hix said.
Right now Hix is encountering many clients who think their homes are worth more than the current market.
“They’ll say, well my neighbor got this, so mine must be worth at least that, which in June and July last summer, yes, but it definitely has cooled off a lot since then,” Hix said.
“I hear it from every taxpayer I talk to, the market is softening. Yes it is a little bit,” Lilla said. “I think the supply is still short, the demand is still high, and as long as those conditions persist, prices are going to continue to go up,” Lilla said.
Lilla says assessments are based on home sales the year before, if the market drops this year it could be reflected in lower assessments coming next year.
“You’re now paying taxes on an assessed value that’s above what you’re selling your property for,” Leisinger said.
In the meantime, Leisinger says she’ll be paying higher taxes based on an assessment she believes is $100,000 more than its worth.
“All of these recent sales that are similar to mine, were around $399,000 to $405,000, every one of them,” Leisinger said. “If I can’t sell it for that amount, why is it ok for them to assess me at that amount?”
Lilla says the majority of homes in Minnehaha County do sell for at or above their assessed value. He says his office wants to hear from you if you think your assessed value is higher than the market value.
Minnehaha County says the majority of homes do sell for at or above their assessed value–and they want to hear from you if you think your assessed value is higher than the market value.
After that discussion, if you still think the assessed value is still to high, you can file an appeal.