Behind on Property Taxes in South Dakota?

Back Taxes in South Dakota: Your Options

This page explains what happens in South Dakota when property taxes on a lot go unpaid. It covers the due dates, the interest, the December tax certificate sale, the tax deed notice, how to redeem, and the choices you have. It is written for owners of vacant land, including people who inherited land with back taxes.

Back taxes do not stop you from selling. A tax certificate sale does not transfer your land. Until a tax deed is issued, you still own it, and you can redeem or sell the land and have the taxes paid at closing from the sale. This page is general information, not legal or tax advice. For your own case, ask your county treasurer or a South Dakota attorney.

When South Dakota property taxes become delinquent

South Dakota property taxes are paid in the year after they are assessed, in two halves. The first half is due by April 30 and the second half by October 31. If the total tax is 50 dollars or less, you must pay all of it by April 30 (SDCL 10-21-23).

An unpaid first half becomes delinquent on May 1. An unpaid second half becomes delinquent on November 1. If the due date falls on a weekend, you have until the last working day of the month (SDCL 10-21-23).

Penalties and interest on late taxes

Delinquent taxes earn interest at the state's Category G rate, which is five-sixths of 1 percent per month or part of a month, or 10 percent a year (SDCL 10-21-23, 54-3-16). Interest is added on May 1 and on the first day of each month after that.

Ask your county treasurer for the payoff amount on the day you plan to pay. Once a tax certificate is sold, the costs of advertising and selling it are added as well (SDCL 10-24-5).

What the county does next

Each year, on the third Monday in December, the county treasurer holds a public sale of tax certificates on land with delinquent taxes (SDCL 10-23-7). A tax certificate is a lien. It does not give the buyer your land. Bidders compete on the interest rate, and the lowest rate wins. No bid above 10 percent a year is valid (SDCL 10-23-8). If no one buys a certificate, it is bid off to the county.

Three years after the sale, and up to six years after it, the certificate holder can start the tax deed process by serving you and other interested people with a notice of intent to take a tax deed (SDCL 10-25-1). If the county assigns an older certificate to a buyer, that buyer has one year from the assignment to start (SDCL 10-25-17). If land is sold at a tax deed sale and the sale brings in more than the taxes, interest, county liens and costs, state law says the surplus must go back to the prior owner of record (SDCL 10-25-39).

Redemption: getting your land back

You can redeem a tax certificate at any time before the tax deed is issued. To redeem one held by the county, you pay the delinquent taxes with penalty and interest to the date you pay, plus the costs of advertising and selling the certificate. The treasurer gives you a receipt and marks the certificate redeemed (SDCL 10-24-5).

If a private buyer holds the certificate, interest runs at the rate that buyer bid, up to 10 percent a year. The county can charge a redemption fee of up to 50 dollars (SDCL 10-23-8). Once the holder has started serving the tax deed notice, the cost of that notice, up to 400 dollars, is added (SDCL 10-25-9).

Your right to redeem ends 60 days after the affidavit of completed service of the tax deed notice is filed with the treasurer (SDCL 10-25-8). If you do not redeem by then, your rights in the land pass to the certificate holder. Read any tax deed notice the day it arrives.

Your options if you are behind

You have several choices. Acting before the December sale avoids the sale costs and keeps the interest lower.

• Pay in full. Ask your county treasurer for the exact amount owed.
• Ask about a payment plan. State law does not set one, so ask your county treasurer whether partial payments are accepted.
• Redeem before the deadline. You can redeem any time before the tax deed is issued, but costs go up once the tax deed notice is served.
• Sell the land. We make a cash offer within 24 hours, charge no fees or commissions, pay the closing costs and can close in as few as 7 days. The back taxes are paid at closing from the sale. Get a cash offer for your South Dakota land.

Selling land with back taxes in South Dakota

You can sell land with delinquent taxes or an outstanding tax certificate. At closing, the taxes, interest and any redemption amount are paid from the sale price, and the certificate is cleared. The buyer gets clear title, and you get the rest.

We buy land with back taxes, liens and title problems, and land without road access. We also buy from heirs and estates. We pay the closing costs. If you have received a notice of intent to take a tax deed, tell us right away, because the 60-day clock may already be running.

Where to check your tax status

Contact the treasurer of the county where the land sits. Ask how much is owed, whether a tax certificate has been sold, who holds it, and whether a tax deed notice has been filed. The South Dakota Department of Revenue county treasurer page has the state's guidance for treasurers, including the tax sale and tax deed process.

The state law is in SDCL 10-21-23 for due dates and interest, chapter 10-23 for the certificate sale, and chapter 10-25 for tax deeds.