SIOUX FALLS — The average property tax assessment in Sioux Falls and the rest of Minnehaha County is up 14.8% this year, although that doesn’t determine how much taxes will be next year.
The assessments on about 77,500 homes, businesses and other parcels in the county will be a factor in determining property taxes next year,but the bill relies also on the combination of levies that are needed to meet the budgets of the county, cities, school districts and townships.
The average countywide valuation is lower than the 18.8% increase last year that was used in figuring property taxes this year.
County Director of Equalization Chris Lilla, who said his job is to fairly and equally determine values of property in the county, said the increase certainly doesn’t mean taxes will be going up that much next year.
Another factor affecting taxes is that growth, especially in Sioux Falls, stretches the need for tax dollars to meet those local government unit budgets.
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He said his office has been using about 4,000 sales or transfers of property in recent years to determine property values in the many neighborhoods and townships throughout the county. The average countywide property valuations is not uniform throughout neighborhoods or house types, but rather on sales that occurred within the neighborhood, he told county commissioners at their meeting on Tuesday, April 4.
Many areas, he said, were adjusted over the average of 14.8%. He gave an example of two neighborhoods that were up only 8.7% and another at 10.8%.
However he said state law requires that all valuation averages in a county be between 85% and 100% of market value.
In Minnehaha County, he said he tries to keep the assessments at about 90% of market value.
County Commissioner Dean Karsky said he and Commissioner Joe Kippley were at a meeting recently where it was reported that 13 counties in the state hadn’t reached the 85% of market values.
Lilla said that likely means they will have to have much larger increases in assessments in future years to try to meet the state requirement to catch up which can really cause property owners to be upset.
Lilla said in an interview with Sioux Falls Live that he was surprised there were counties that weren’t meeting the state law.
Although almost all assessments are now in place as deadlines have passed in Minnehaha County and others to file objections.
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However, Lilla said a few days are set aside starting Monday, April 10, for the Minnehaha County commissioners to hear final appeals on about 40 residences and 27 commercial properties whose owners are objecting
He told county commissioners at their last meeting that the real estate market was “strong” again when analyzing sales from Nov. 1, 2021 through Oct. 31 of last year to determine this year’s assessment increase.
Lilla said although the real estate market softened some in the past year, that values likely will continue to increase despite higher mortgage interest rates and demand.
When he meets with some property owners, he said he often shows them sales in their neighborhoods and objections drop. However, there are some outstanding issues that can affect properties.
Lilla said one of his relatives often complains about his valuation, but he explains that having the value go up on a home is a positive to have one of a person’s biggest assets see an increase.
Of course, it does affect taxes, Lilla added.
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