HELENA — Across Montana, homeowners are starting to see the first evidence of the changes lawmakers made to property taxes earlier this year.
After four months of discussion and debate during its 2025 session, the Montana Legislature eventually approved a pair of bills – Senate Bill 542 and House Bill 231 – that completely reshaped property tax rates.
(Watch the video for more on what homeowners will see on their property tax bills.)
Most residents pay property taxes at the end of November and the end of May, and counties have been sending out bills in recent weeks. The latest bills reflect new graduated rates for 2025: if a property is worth more, its tax rate will be higher. In general, the changes should lead to lower rates for homes worth less than about $2 million.
Gov. Greg Gianforte and his allies have praised the impact of the new rate structure. This week, the governor’s office shared statistics from the Montana Department of Revenue, saying about 80% of Montana homes will see a property tax cut, and another 10% will have their taxes remain flat.
“For years, Montanans have said property taxes are too high, and they’re right,” Gianforte said in a statement. “Our focus has been securing meaningful, long-term property tax relief for Montanans in the place they call home, and we’ve delivered. The data make it clear that these reforms are a win for Montana homeowners.”
Rep. Llew Jones, R-Conrad, one of the primary legislative backers of the property tax plan, agreed.
“The median house in every area is lower,” he told MTN. “It is doing on residential what it meant to do.”
The demand for property tax reform grew louder after a 2023 spike in residential property values, which Jones says led to homeowners bearing a larger share of the property tax burden. He argues, if it hadn’t been for the changes the Legislature passed, that trend would only have continued this year.
“In particular, the upper-end residential and in certain portions of the state, the market value went up and continued to increase,” he said. “The pull on to residential from the other classes would have generally continued.”
But Sen. Carl Glimm, R-Kila, says he’s hearing from plenty of people who are unhappy with the changes as well.
“A lot of commercial people are seeing their property taxes go up, and that transfers into just, we're hurting Montana business,” he told MTN. “We're supposed to be a pro-business state, we're supposed to be looking out for the mom-and-pop shop – and really, what we're doing there is raising their costs, which means that they have to pass them on to the consumer.”
Glimm had sponsored Senate Bill 99 during the session, which would have put state tax revenue – either from tourism taxes or income taxes – toward offsetting property taxes. He argues that would have allowed for real reductions, while the plan that passed only shifted the burden back to commercial and agricultural properties.
“The state has had a lot of money in the last few years, but we haven't been willing to put any of that towards property tax relief,” he said. “That's, I think, what needs to happen.”
SB 542 and HB 231 did provide a lower rate for the first $400,000 in value for commercial properties. Jones says, while businesses will bear a greater share of the tax burden going forward, commercial properties also benefited in recent years as residential property values grew faster.
“To suggest that rebalancing that is not equitable seems a little out of line,” he said.
Montana property owners shouldn’t get used to the rates they see this year, though: They’re only temporary. Next year, a new “homestead” tax system takes effect. Essentially it will provide lower property tax rates for primary residences, long-term rentals and smaller commercial properties, but increase rates on properties that don’t qualify for homestead rates.
“It's going to be difficult, because you've got one set of circumstances for this year, and then we're going to stick the blender in it again for next year, and it's going to be a whole different situation,” said Glimm.
Property owners will need to apply for the homestead rate. However, if a Montana resident has received the tax rebate on primary residences earlier this year, their home will be automatically enrolled for the homestead program. The Department of Revenue has been sending out letters informing those homeowners that they won’t need to apply, as long as they still own it and have their primary residence there.
Jones said he expects most people who qualify for the homestead exemption on their home will get automatically enrolled, but that there may be more issues for owners of long-term rentals.
“You better sign up in December, or your rates’ll begin to be impacted the subsequent year,” he said.
You can check if your home is already enrolled in the homestead program on the Revenue website. If not, you’ll be able to apply there for the homestead or long-term rental rate, starting Dec. 1.
Jones admits the complex final property tax plan included one big error: In the drafting of the two main bills, there was an oversight in the 2025 tax rates for multi-family residential property. The effect is that multi-family housing worth between $1.5 million and $2 million is taxed at a higher rate than multi-family housing worth more than $2 million.
“The multi-family rate got put in incorrectly,” Jones said.
The error is only going to apply to 2025; the 2026 rate structure will resolve it. Jones said he’ll encourage lawmakers in 2027 to pass a bill providing an incentive for owners of affected properties who don’t raise their rent in response to the increased taxes.
“We're going to try to reward those that don't react to it, knowing that it's a one-year challenge,” he said. “We can’t change what is, we’ve got to just talk what we’re going to do about it.”
Jones blamed the issue on opponents of the homestead rates, who he argues delayed passage of the bill long enough that the Department of Revenue couldn’t implement it in the first year and lawmakers needed to draft the temporary rate structure for 2025.
Glimm says the multi-family issue was a sign that lawmakers didn’t fully understand what was in the property tax plan when they voted on it near the end of the legislative session.
