"What Does South Dakota's Certificate of Real Estate Value (PT-56) Ask, and Who Reads It After My Deed Is Recorded?"

Somewhere in the stack of papers for a South Dakota closing is a single page that never mentions your loan. It asks who sold the property, who bought it, what was paid, whether the two sides are related, and whether a riding mower or a dining set came along with the price. It is called the Certificate of Real Estate Value, and your deed does not go on the public record without it.

South Dakota's Certificate of Real Estate Value, form PT-56, has to accompany any deed or contract for deed presented for recording, and the register of deeds cannot record the deed without it. The form declares the price, the payment terms and the relationship between the parties, and copies reach the county auditor, the Director of Equalization and the Department of Revenue.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, licensed in fifteen states, including South Dakota, NMLS #483943, through C2 Financial Corporation. This article stays on the form itself. The transfer fee and who owes it are a separate question, and the South Dakota mortgage page covers the transfer fee and who pays it.

What is the Certificate of Real Estate Value in South Dakota?

It is the state's record of the sale, filed alongside the deed. South Dakota's register of deeds statute, SDCL 7-9-7, bars the register from recording a deed or contract for deed unless a certificate of value comes with it. A contract for deed is an installment purchase in which the seller keeps legal title until the price is paid. The statute exempts one kind of deed from the certificate, a transfer on death deed.

The Department of Revenue's register of deeds page puts it in one line: the PT-56 must be filed with any deed or contract for deed. That page also names three documents that do not need one, which are a divorce decree, a probate decree and an easement. A standard purchase with a warranty deed needs one.

The form number matters because the Department of Revenue sets the form by rule. Administrative Rule 64:04:01:06.01 says the certificate required by SDCL 7-9-7 is the PT-56, and that blank copies are available at the register of deeds office in every county.

The questions the PT-56 asks about your purchase

The rule lists what the certificate has to capture, and none of the questions are about your loan or your credit. In plain terms, the form asks for:

• The names of the buyers and sellers, their current mailing addresses, their new mailing addresses and their phone numbers.
• The legal description of the property, plus the acreage if the land has never been divided into recorded lots on a plat.
• Whether the property is owner-occupied. The form also asks whether you are living in it as of a certain date, and, as its own question, whether you will have owner-occupied status.
• Whether the property was offered for sale to the general public, and whether the owner or an agent sold it.
• Any major item of personal property included in the total purchase price, along with its value and the adjusted price paid for the real estate alone.
• Whether the buyer and seller had a prior relationship.
• The actual consideration, which means the price and anything else of value given for the property.
• The payment terms, if the price is not paid in full at closing.
• The signature of one party or an agent.

The rule only needs one signature, so the form can be signed by you, by the seller, or by someone acting for one of you. On your purchase, the closing agent can tell you who is preparing it and whether they need anything from you before closing day.

For the new mailing address, if you are moving into the home, the right answer is the home's address. If you are buying from out of state and will keep getting mail somewhere else for a while, the address the form needs is the one where you will receive mail after closing.

Who reads the certificate after your deed is recorded?

Three offices receive it, on a monthly schedule. The Department of Revenue's register of deeds page says the original certificate stays with the register of deeds. At the end of every month, the register certifies the transfer information and sends it to the county auditor, the Director of Equalization (the county office that values property for tax purposes) and the Department of Revenue. The Director of Equalization receives the certificate of value itself.

The law backs that up from the other direction. SDCL 7-9-7.1 requires the register to make the information collected under the certificate statute available to the Director of Equalization and the Secretary of Revenue.

Those offices use the price to check property assessments. The Department of Revenue runs a yearly sales ratio study that compares assessed values with sale prices to measure the level and uniformity of assessments in each county. The Department's sales ratio guidelines set out how sales are verified before they are used in that study.

So the price on your certificate does two jobs at once. It is the record of what you paid, and once verified as an open-market sale, it can become one of the sales other homes in your county are measured against.

The owner-occupied question on the PT-56 and the separate certification

The PT-56 asks whether you will have owner-occupied status, and it is easy to read that box as the whole job, but it is only a question on a sales form. The classification that lowers the school levy on your home is a separate certification you file with the county Director of Equalization. The article on certifying your South Dakota home as owner-occupied walks through the March 15 filing and the November 1 date behind it.

Answering the PT-56 truthfully gives the county a heads-up, but filing the certification is what puts the classification on your property, and the effect shows up in how your South Dakota property tax bill and escrow account line up.

How the certificate connects to the transfer fee

The certificate is also where the value for the transfer fee comes from. SDCL 43-4-24 has the register of deeds collect the fee when a taxable deed is offered for recording, compute it on the declared value, and indicate the amount on the face of the deed. In the statute's own definitions in chapter 43-4, value on a deed that is not a gift means the full consideration paid or to be paid.

The law puts that fee on the seller, so it is not a line for you to budget. The certificate is still yours to get right, because the number on it is the number the county records for your sale.

Deeds that are exempt from the transfer fee

Some transfers do not owe the fee at all. SDCL 43-4-22 lists the exempt transfers in numbered sections, which the statute calls subdivisions. Two that a homeowner may run into are a transfer made only to provide or release security for a debt, and a transfer for which no consideration was given.

An exemption has to be claimed on the deed itself. SDCL 43-4-23 requires every transfer that is not subject to the fee to carry the words "exempt from transfer fee" and to state which subdivision of 43-4-22 the exemption is claimed under. A deed that says it is exempt without naming the subdivision does not meet that rule.

An exemption from the fee does not remove the certificate. The Department of Revenue's instruction is that the PT-56 goes with any deed or contract for deed, and the exemptions in SDCL 43-4-22 are about the fee rather than the form. A quitclaim deed adding your spouse to title, for example, may be exempt from the fee and still need a certificate when it is recorded. Your attorney or closing agent can confirm which subdivision applies to a specific deed.

The penalty for a false value on the certificate

SDCL 43-4-26 makes it a Class 1 misdemeanor to falsify the value of transferred real estate to the register of deeds, or to intentionally claim an exemption that does not apply, to pay less fee or none.

On an ordinary financed purchase, the price on the certificate should be the same price that is on your purchase agreement and your Closing Disclosure, because all three describe the same sale. If personal property is part of the price, the form gives you a separate line to list it and its value, so the real estate price can stand on its own.

The steps on a typical South Dakota purchase

1. Your purchase agreement is the place to check for personal property. If furniture, equipment or anything else of real value is included in the price, you and the seller will want to agree on its value before the certificate is prepared.
2. Your closing agent can tell you who is preparing the PT-56. They can also tell you whether they need your new mailing address and phone number from you.
3. You'll want to read the draft before anything is signed, so you can check that the names, the legal description, the price and the payment terms match your purchase agreement.
4. The relationship question is best answered exactly as things are. A sale between relatives or related businesses is common, and the form asks about it directly.
5. Your owner-occupied certification is its own filing. You send it to the Director of Equalization once you have moved in, because the PT-56 box does not do that for you.
6. A copy of the recorded deed is worth keeping. The register's notation of the fee on its face, or the exemption language, is your record of how the transfer was handled.

Common mistakes on the certificate

Treating the owner-occupied box as the filing. A new owner who stops at the PT-56 can end up on the higher school levy for a cycle, because the certification is a separate form filed with the Director of Equalization.

Leaving personal property inside the price. If a sale includes a furnished lake cabin's furniture or a set of outbuilding equipment, the form asks for that value and the adjusted price for the real estate. Leaving that value inside the price makes the real estate look like it sold for more than it did.

Assuming an exempt deed needs no paperwork. An exemption changes what fee is owed, but the deed still needs the "exempt from transfer fee" language with the subdivision, and the certificate still goes with it.

Giving an old mailing address. The form asks for your new one, which is the address where you will be getting mail after closing.

An illustration

The numbers below are made up to show the mechanism. They are not a real client or a real sale.

You are buying a lake property near Pierre for $385,000. The sellers are leaving the dock furniture, a pontoon lift and a riding mower, and the two of you agree in the purchase agreement that those items are worth $6,000 together.

Total purchase price                 $385,000
Major personal property included    -  6,000
                                    ---------
Adjusted price for the real estate   $379,000

The certificate lists the $385,000 total, the personal property and its $6,000 value, and the $379,000 adjusted price for the real estate. You have no prior relationship with the sellers, you are paying in full at closing with a new mortgage, and you will live there, so the owner-occupied question gets a yes.

The deed records, the register notes the transfer fee on it, and the sellers pay that fee. At the end of the month the transfer information goes to the three offices. In the spring, you file your owner-occupied certification with the Director of Equalization as its own step.

If you are financing a home like this one, getting pre-approved for a South Dakota purchase is the step that comes before any of this paperwork. The pricing tools on the homepage let you see rate options for your scenario before you talk to anyone.

For the rest of your closing costs, how closing costs work on a purchase lays out what is yours to budget.

Common questions

What is form PT-56 in South Dakota?

Form PT-56 is South Dakota's Certificate of Real Estate Value. It is filed with any deed or contract for deed presented to the county register of deeds, and SDCL 7-9-7 bars the register from recording the deed without it. The Department of Revenue sets its contents by Administrative Rule 64:04:01:06.01, and blank copies are available at every county register of deeds office.

Who gets a copy of the South Dakota Certificate of Real Estate Value?

The register of deeds keeps the original. According to the South Dakota Department of Revenue, the register certifies the transfer information at the end of every month and sends it to the county auditor, the county Director of Equalization and the Department of Revenue. The Director of Equalization receives the certificate of value itself and uses sales information in assessing property.

Do I need a PT-56 if my deed is exempt from the transfer fee?

Yes. The Department of Revenue says the PT-56 must be filed with any deed or contract for deed, and the exemptions in SDCL 43-4-22 are exemptions from the fee. Under SDCL 43-4-23, an exempt deed must also carry the words "exempt from transfer fee" and name the subdivision of 43-4-22 it is claimed under.

Do I file a Certificate of Real Estate Value when I refinance in South Dakota?

The certificate requirement in SDCL 7-9-7 is written for deeds and contracts for deed. An ordinary refinance records a new mortgage on a home you already own and does not transfer title by deed, so the certificate is not part of it. If the refinance also adds or removes an owner by deed, your closing agent can confirm what that deed needs, because it is a separate recording. Refinancing in South Dakota covers the rest of that process.

Does the PT-56 make my South Dakota home owner-occupied for property tax?

No. The form asks whether you will have owner-occupied status, but the classification comes from a separate Certification of Owner-Occupied Dwelling that you file with your county Director of Equalization. The Department of Revenue's deadline for that certification is March 15, and eligibility depends on having owned and occupied the home before November 1 of the year before.

What happens if the value on the certificate is wrong on purpose?

Under SDCL 43-4-26, it is a Class 1 misdemeanor in South Dakota to intentionally falsify the value of transferred real estate to the register of deeds. The same is true of intentionally claiming a transfer fee exemption that does not apply, to pay less fee or none. The statute's word is intentionally, so it is aimed at a deliberate false value or a deliberate false claim of exemption.

Nothing here is a credit decision or legal advice. Your closing agent or a South Dakota attorney can confirm how a specific deed should be prepared and recorded. See your way home.