What is a property tax abatement?

A property tax abatement is a reduction in the property taxes due on a property. It is usually granted by local governments to incentivize economic development. In South Dakota, property tax abatements are granted through the South Dakota Abatement of Taxation Law. This law allows businesses and organizations to apply for abatements on taxes associated with real and personal property. The amount of the abatement is determined by a variety of factors, including the value of the property, the amount of taxes due, and the use of the property. In some cases, the abatement may be a percentage reduction of the total taxes due, while in other cases, it may be a predetermined or fixed sum. To be eligible for an abatement, applicants must meet certain requirements, including proving that the property would not be developed without the abatement, that the abatement would create jobs or increase economic activity in the area, or that the abatement would result in a significant increase in the taxable value of the property. Property tax abatements are frequently used to attract new businesses to an area or to encourage existing businesses to expand. In South Dakota, the abatement process is administered by the South Dakota Office of Economic Development and International Trade.

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