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Investing guides / South Dakota

South Dakota tax sale investing: buy the tax debt, earn the rate

Quick answerSouth Dakota sells tax lien certificates for unpaid property taxes. Lien buyers can earn Up to 10% per year, bid down — the lowest interest rate bid wins and no bid above 10% is valid (SDCL 10-23-8). Redemption: Owner may redeem at any time before a tax deed issues (SDCL 10-24-1). The certificate holder may start tax deed proceedings after 3 years from the certificate sale and within 6 years (SDCL 10-25-1); redemption does not expire until 60 days after the affidavit of completed service of notice of intent to take a tax deed is filed (SDCL 10-25-8). Sales: Annual tax certificate sale on the third Monday in December, 9 a.m.-4 p.m., at the county courthouse (SDCL 10-23-7), where the county holds a sale Governing law: South Dakota Codified Laws Chapters 10-23 to 10-25 (SDCL 10-23-7, 10-23-8, 10-24-1, 10-25-1).

How it works in South Dakota

In South Dakota you are not buying property at the sale — you are buying the county's tax lien certificate for the amount of taxes owed, and the owner owes you interest until they redeem.

Interest / penalty: Up to 10% per year, bid down — the lowest interest rate bid wins and no bid above 10% is valid (SDCL 10-23-8)

Redemption: Owner may redeem at any time before a tax deed issues (SDCL 10-24-1). The certificate holder may start tax deed proceedings after 3 years from the certificate sale and within 6 years (SDCL 10-25-1); redemption does not expire until 60 days after the affidavit of completed service of notice of intent to take a tax deed is filed (SDCL 10-25-8).

When sales happen: Annual tax certificate sale on the third Monday in December, 9 a.m.-4 p.m., at the county courthouse (SDCL 10-23-7), where the county holds a sale

Where sales run: Mostly in-person at the county courthouse, County treasurer sales; no dominant statewide online platform verified

Governing law: South Dakota Codified Laws Chapters 10-23 to 10-25 (SDCL 10-23-7, 10-23-8, 10-24-1, 10-25-1)

The investor's edge

Your edge is rate discipline: know the statutory maximum, know what the sale historically bids down to in your target counties, and set a floor rate you will not cross before the sale starts.

CORRECTION to older guides: current SDCL 10-25-1 sets a single 3-year period to begin deed proceedings (within 6 years) — the pre-amendment 3-year-inside / 4-year-outside a municipality distinction in older case law no longer appears in the current statute text. If no private buyer bids, the county takes the certificate and may later assign it.

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Full legal reference: South Dakota tax sale laws. Verified 2026-10-30 against the sources on that page. Educational only, not investment advice.