Understanding Montana’s New Property Tax Structure | 2026

Summary: Montana’s property tax system changed in 2026. Primary residences and qualifying long-term rentals now pay lower, tiered “homestead” rates, while second homes and short-term rentals pay a flat 1.9%. Here’s how Montana property taxes work, how the new rates are calculated, and what to do if your home isn’t enrolled.

2026 bills are going out now. County treasurers began mailing the first tax bills calculated under the homestead rate around Oct. 31. If you own in the Gallatin Valley, see what’s on this year’s Gallatin County tax bills for due dates, how to check your rate and what to do if something looks off.

How Are Property Taxes Calculated in Montana?

Montana’s property tax system is more complex than it first appears. Here’s how it breaks down:

1. Appraisal. Every two years, the Montana Department of Revenue reappraises residential, commercial, agricultural and industrial property. Values are based on what similar properties sold for in recent years.
2. Tax rate by property class. The Legislature sets the rates that turn your home’s market value into its taxable value. For years, residential property was taxed at a flat 1.35%. The 2025 Legislature replaced that with temporary graduated rates for 2025, then the homestead system starting in 2026 (more below).
3. Mill levies. Local governments, including counties, cities and school districts, apply mill levies to that taxable value. A mill is $1 per $1,000 of taxable value. Mills fund schools, roads, fire, police and local government, and they change from year to year with local budgets.

The key point: you aren’t taxed directly on your home’s value, but on its taxable value multiplied by local mill levies. That’s why a lower appraisal doesn’t always mean a lower bill. If local governments need the same revenue, mill levies can rise.

How Did the 2023 and 2025 Reappraisals Affect Montana Property Values?

In 2023, many Montana homeowners saw dramatic jumps in appraised values, about a 45% median rise statewide, reflecting the pandemic-era surge. Tax bills went up too, though not always as much as homeowners feared, thanks to adjustments in rates and mill levies. The state also issued a one-time rebate to qualifying residents.

The 2025 reappraisal sets values for the 2025 and 2026 tax years. The Department of Revenue estimates the statewide median home value for this cycle at $378,000, and that number now matters more than ever because it sets the brackets for the new homestead rates.

What Changed With Montana Property Taxes in 2026?

Montana’s 2026 overhaul shifted more of the tax burden onto second homes and short-term rentals while easing it for full-time residents and long-term rentals. The changes came from House Bill 231 and Senate Bill 542, both passed in 2025.

What Are Montana’s 2026 Homestead Tax Rates?

Montana’s 2026 homestead rates range from 0.76% to 1.9%, depending on how a home’s market value compares to the $378,000 statewide median. If your property is your primary residence (you live there at least seven months of the year) or a qualifying long-term rental (rented for at least 28 days at a time, for at least seven months of the year), it qualifies for these rates:

These rates work like income tax brackets. Each slice of your home’s value is taxed at the rate for that slice, not the whole value at the highest rate it reaches.

For example, a $600,000 primary residence:

• First $378,000 × 0.76% = $2,872.80
• Remaining $222,000 × 0.90% = $1,998.00
• Taxable value: $4,870.80

Your bill is that taxable value multiplied by your local mill levy. The same home taxed as a second home would have a taxable value of $11,400 (1.9% of $600,000).

The Governor’s Office says homeowners who saw a tax cut under the reforms saved more than $500 on average, not counting the up to $400 rebate in 2025.

How Much Is Montana’s Second Home Tax?

Second homes and short-term rentals in Montana are taxed at a flat 1.9% of full market value starting in 2026. That includes any property that doesn’t qualify as a primary residence or long-term rental, such as vacation properties and Airbnb/VRBO units. For many of these owners, that means a 60–68% cumulative increase compared with 2024.

Actual bills vary. The effect depends on local city, county and school district mill levies, along with how the state assessed each property compared with others in the area.

How Do I Qualify for Montana’s Homestead Rate?

Primary residences and long-term rentals must be enrolled to get the reduced rates. It doesn’t happen on its own. You also need to be current on your property taxes.

• Check your status with the Department of Revenue’s Verify Your Enrollment tool. You’ll need your property’s geocode, which is on your tax bill.
• Enroll for 2027 on DOR’s enrollment page by March 1, 2027.
• Landlords: follow the instructions here to enroll a long-term rental.

Ownership matters. Homes owned by an individual, a couple or a grantor revocable trust can qualify for the homestead rate. Homes owned by an LLC, corporation, partnership or irrevocable trust can’t, though those owners can still qualify for the long-term rental rate.

Many homeowners who claimed the 2025 property tax rebate were enrolled automatically, as long as they didn’t move or change ownership in 2025. It’s still worth confirming, since automatic enrollment didn’t carry over for everyone. If your property has an ADU or other rental unit, that unit has to be enrolled separately as a long-term rental, even if your main home was enrolled automatically.

What If I Missed the Homestead Enrollment Deadline?

The deadline for 2026 was March 20, 2026. If your primary residence qualified but wasn’t enrolled, it’s taxed at the 1.9% rate this year. You can request a refund of the difference through the Department of Revenue’s 2026 Property Tax Refund page from Jan. 1 through May 31, 2027. You’ll need your Social Security number and your property’s geocode.

To qualify, the home must have been your primary residence for at least seven months of 2026, and your 2026 taxes and any past balances must be paid in full. The refund covers the difference between the two rates, not your whole bill.

The Department can’t process a refund until the county confirms your taxes are paid. If you only pay the first half this fall, your refund won’t be processed until after the second half is due in May. Paying the full year by your first-half due date is the fastest way to get your money back.

If your refund is approved, your home is automatically enrolled for 2027. If you’re not sure you qualify, enroll for 2027 by March 1, 2027.

Does the Homestead Rate Transfer When You Buy a Home?

No. The homestead rate is tied to the owner, not the house. New owners have to enroll in their own name, so the taxes on a listing reflect the seller’s situation, not necessarily what you’ll pay. If you bought a home this year that wasn’t enrolled, you’ll pay the 1.9% rate for 2026 even if it’s now your primary residence. If you lived there at least seven months of 2026, you may qualify for the refund above. If not, enroll for 2027 by March 1, 2027.

If you’re buying in an LLC or trust, or the property has an ADU, ask your agent how that affects your rate before you write an offer.

Is Montana’s Homestead Tax Law Being Challenged in Court?

Two lawsuits challenge Senate Bill 542. The first, filed in January 2026, argues the bill was changed too much on its way through the Legislature. The second, filed in October, argues that homes in the same tax class can’t be taxed at different rates. A district judge in Bozeman heard arguments in the first case on Oct. 21, 2026, and set a Nov. 13 deadline for both sides to submit proposed orders. For the latest, see our Gallatin County tax bill update.

Who Pays More and Who Pays Less Under the New Law?

• Homeowners. Full-time residents benefit from the reduced tiered rates, though mill levies still shape the final bill.
• Long-term rental owners. Properties that provide year-round housing qualify for the same tiered rates, as long as they’re enrolled.
• Second homes and short-term rentals. Investors and part-time residents carry more of the tax burden starting in 2026.

The changes are designed to ease the strain on Montana residents while shifting more of the cost to investment and vacation properties.

How Do I Appeal My Montana Property Appraisal?

If you believe your home was valued incorrectly:

1. Check your property information on the Department of Revenue website.
2. Contact the department at 406-582-3400 or dorpadbozeman@mt.gov with questions.

3. Submit a Request for Informal Review (Form AB-26) through mtrevenue.gov if needed. Supporting documents can include a recent purchase price, a fee appraisal, comparable sales or a builder’s cost breakdown.

    

Bottom Line

Montana’s property tax system looks very different in 2026. Primary homeowners and long-term landlords who are enrolled pay lower, tiered rates, while second-home owners and short-term rental investors pay a flat 1.9%. Understanding how appraisals, rates and mill levies work together is the best way to read your bill and plan ahead, and the single most important step is making sure your home is enrolled.