Confused about the new property tax law in Montana?
Perhaps, more than confused, bewildered?
Maybe there are aspects of the law that don’t quite fit with your situation.
Real estate broker, Bill Stene is alarmed because he believes there are unintended consequences of the law that will create windfalls for some, while penalizing others, most especially when it comes to selling property in the future.
Stene is sponsoring a seminar on Tuesday, February 24, 7 pm at the Billings Hotel and Convention Center, the Yellowstone Room, to raise awareness about the situation. The public is invited to attend.
Most property owners registered for a property tax rebate last year on their residence, in order to collect a rebate on their property taxes. The requirement was made necessary by the passage of legislation aimed at shifting more of the burden of property taxes onto second home owners, out-of-state vacation home owners and short term rentals.
This year the state will implement a new property tax structure that includes significant rebates for eligible homeowners and long-term rental properties. Stene is concerned that there are some downfalls in the proposed structure, in that it doesn’t account for the varying circumstances that may face some property owners. It’s a dilemma that will pose winners and losers when it comes to selling properties.
Some owners will find that their property is not “saleable,” said Stene, because their taxes are so much higher. “Anybody who owns a house or any kind of property needs to be concerned,” said Stene, adding that “Everyone should register by March 1.”
Homeowners who received a property tax rebate in 2025 and continue to live in their primary residence for at least 7 months in 2026 automatically qualify for the rebate this year. Long-term rentals (rented for 28+ days for at least 7 months/year) also qualify.
Property owners who did not apply last year, must apply for the rebate between December 1, 2025, and March 1, 2026. Those who are already enrolled from the previous year can verify their status online.
The new tax structure will reduce tax rates for primary residences and long-term rentals. Homeowners can expect an 18% decrease in property taxes, while long-term rentals may see a 22% reduction compared to previous years.
Starting in 2026, properties will be classified into different categories, with lower rates for homesteads and higher rates for non-owner-occupied properties. The change aims to provide relief to owner-occupants while increasing taxes on second homes and vacation properties.
Issues arise, however, when a property is shifted from a rental to owner occupied. Stene says that the new property tax law impacts the values of properties on the market.