Property tax relief measures a work in progress

The 2023 Montana property tax appraisal notices and subsequent property tax bills sent shockwaves through the state.  Homeowners saw appraised values skyrocket due to a shortage of available properties as a result of the influx of new residents spurred by the remote work phenomenon and the “Yellowstone effect.”

As the Montana Legislature convened in January, the imperative communicated by constituents was to address the property tax issue. 

Montana currently has 16 classes of property, each paying a different property tax rate. The 2023 appraisals shifted much of the burden onto residential property and away from the other classes of property as residential valuations increased significantly while the valuations in the other classes remained largely static. 

In the 2025 legislative session, both political parties introduced legislation intended to address the problem.  

The Republican proposal coming from the governor’s property tax task force sought to solve the problem solely within the residential classification by lowering the tax rate on an individual’s primary residence while making up the lost revenue through a tax increase on non-primary residences (second homes).  

The Democrats proposal was to “rebalance” the property tax burden among the 16 classes of property to proportional shares similar to those found prior to the 2023 reappraisal. The Democrats planned to accomplish this through implementation of a progressive tax schedule (similar to the income tax schedules) where a lower tax rate is applied to an initial portion of a home’s value with the tax rate increasing incrementally as the value of the home increases. 

While neither party achieved all they wanted in the final solution, elements of both proposals were negotiated into a bill which passed on the final day of the legislative session and was ultimately signed by the governor. 

By now all residential property owners should have received their 2025 property tax appraisal notices. Please note these are not your tax bills, but represent the current market value of your home as determined through a comparable sales model used by the Montana Department of Revenue.  

While the average residential property in Montana saw another 22% increase in value, the important numbers on which you should focus are the prior taxable value and current taxable value, found on the right side of the appraisal matrix.  

In 2023 and 2024 a tax rate of 1.35% was applied to the residence’s value to determine the taxable value listed in the prior taxable value column.  In 2025, the new progressive tax rate (starting with the first $400,000 taxed at 0.76%) is used to calculate the current taxable value.  

In most cases homeowners will find that, despite an increase in the home’s appraised value, the taxable value decreases. This new taxable value will be multiplied by the number of mills levied by local governments and local schools (in addition to the statewide school mills) to determine the amount of tax. Those tax bills will be mailed in late October. 

In addition to a reduction in the tax rate, the Legislature passed a rebate of up to $400 for homes occupied by the owner for a minimum of seven months in 2024. The rebate application will go live on the Department of Revenue website (revenue.mt.gov) on Aug. 15 and the application window will close on Oct. 1. 

If a homeowner believes the new appraised value of the residence is not accurate, the homeowner may complete form AB26, available on the Montana Department of Revenue website. AB26 appeals must be completed within thirty days of the date the new assessment notice was mailed. 

In 2026, owner-occupied primary residences will see another reduction in property tax rates.  However, beginning in 2026 second homes will no longer benefit from the reduced tax rates and will see an increase in property taxes. 

While not a perfect solution, most Montanans will see property tax relief as a result of legislative action. Know that as Democratic legislators serving on the House Taxation Committee we will be seeking feedback from constituents to determine what additional adjustments merit consideration during the 2027 session. 

Rep. Mark Thane, D-Missoula; co-signers: Rep. Jane Weber, Rep. James Reavis, Rep. Brian Close, Rep. Melissa Romano, Rep. Pete Elverum, Rep. Jill Cohenour and Rep. Jonathan Karlen.