Clay County adjusts non-ag rural land valuations to meet market standards

The April 1, 2025, County Commission Meeting in Clay County, South Dakota, focused on significant changes to land valuation and assessment practices, reflecting the county's response to evolving market conditions and state regulations. The discussions highlighted a notable increase in property values, particularly for non-agricultural rural land, which has seen a dramatic shift in market dynamics.

During the meeting, officials reported that building permits across the county indicated a 5% to 13% increase in home values, aligning with broader market trends. However, non-agricultural rural land experienced a more pronounced adjustment, with the county implementing a new valuation strategy. The first acre of non-agricultural land is now valued at $50,000, with subsequent acres priced at $7,500. This change aims to better reflect current market conditions, as previous valuations were significantly lower, often pegged at just $2,000 per acre.

The decision to adjust land values was influenced by recent sales data, including a notable transaction where a 40-acre parcel sold for $15,500 per acre. This prompted the county to reassess its approach, opting for a "rip the band-aid" strategy to implement these changes in one year rather than spreading them over several years, a method that has left neighboring counties lagging behind.

Commissioners also discussed the classification of non-agricultural land, clarifying that parcels not actively used for agricultural purposes could still be assessed differently based on their characteristics. This includes wooded areas or parcels with water features, which have historically been undervalued. The county is now working towards compliance with state regulations that require land assessments to be based on productivity rather than arbitrary dollar amounts.

Additionally, the meeting touched on the complexities surrounding agricultural status for land parcels. Officials acknowledged that many properties classified as agricultural do not meet the current state requirements, which necessitate an active agricultural pursuit. This discrepancy has raised concerns about equitable tax relief and the need for a thorough review of land classifications.

In conclusion, the Clay County Commission's meeting underscored the importance of adapting land valuation practices to reflect market realities and comply with state guidelines. As the county moves forward, officials anticipate further discussions on agricultural classifications and the potential need for audits to ensure fair assessments. The changes implemented are expected to have lasting implications for property owners and the local economy, as the county seeks to align its practices with the evolving landscape of land use and valuation.