This state just passed major property tax cuts—here’s who benefits, and who’s footing the bill
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For many Americans, the dream of owning a home comes with a growing concern: rising costs.
That’s especially true in states like Montana, where popularity and property values have surged in recent years.
Now, state lawmakers have taken bold action to try and keep housing affordable—especially for long-time residents—by passing a pair of bills that reduce property taxes for many homeowners.
But as with most major policy changes, there’s more to the story.
While the cuts could provide relief for thousands of Montana homeowners, they’re also shifting the tax burden to other groups—including owners of second homes, large landholders, and oil and gas companies.
Here’s what’s changing, who’s most affected, and what this might mean for homeowners and future buyers across the country.
In late June, Montana passed two bills—House Bill 231 and Senate Bill 542—that could cut property taxes by nearly half for owner-occupied homes and long-term rentals.
These changes are being phased in gradually, with four tiers of property tax rates based on home value.
By 2026, a fourth tax tier will be added to give the system more flexibility.
Montana’s housing market has changed rapidly.
The state has long attracted people looking for open space and natural beauty, but with the increase in demand has come a steep rise in home prices—and, by extension, property taxes.
According to Realtor.com, the income needed to buy a home in Montana has increased by 85% in just a few years.
That’s made it harder for many residents, especially long-timers, to stay in their homes.
Lawmakers say these bills are meant to help the people who live and work in the state—not just those buying vacation homes or investing in short-term rentals.
To balance out the revenue loss from the tax cuts, the state is shifting more of the burden to:
This tax shift has sparked debate in the state capital.
Supporters say it’s a necessary move to protect working families.
Critics argue it’s unfair and could create financial strain for businesses and property investors.
Possibly. Former lawmakers, tax experts, and local officials have raised concerns about how complex the new system is and how it might affect funding for schools and local governments.
Some parts of the plan may be challenged or delayed as the state finalizes the rollout.
The Montana Department of Revenue is now responsible for building the systems that will manage the new tax structure and ensuring it’s implemented fairly.
Montana’s changes come at a time when housing affordability is a growing concern nationwide.
A recent Bankrate study showed that the income needed to buy a median-priced home in the US has jumped from about $78,000 in 2020 to nearly $117,000 today.
States across the country are searching for ways to keep housing within reach.
Whether Montana’s tax plan becomes a model for others—or a cautionary tale—remains to be seen.
Read next: Think twice before sharing that viral post—it could be a scam.
Do you own property in Montana? Have you felt the impact of rising taxes or housing costs? What do you think about shifting the tax burden away from primary homeowners and onto investors and corporations? Share your thoughts in the comments!
That’s especially true in states like Montana, where popularity and property values have surged in recent years.
Now, state lawmakers have taken bold action to try and keep housing affordable—especially for long-time residents—by passing a pair of bills that reduce property taxes for many homeowners.
But as with most major policy changes, there’s more to the story.
While the cuts could provide relief for thousands of Montana homeowners, they’re also shifting the tax burden to other groups—including owners of second homes, large landholders, and oil and gas companies.
Here’s what’s changing, who’s most affected, and what this might mean for homeowners and future buyers across the country.
Montana’s sweeping new tax policy aims to ease the burden on homeowners—but not everyone is on board with the changes. Image Source: YouTube / Latest Global Tax News.
What’s changing under Montana’s new tax plan?
In late June, Montana passed two bills—House Bill 231 and Senate Bill 542—that could cut property taxes by nearly half for owner-occupied homes and long-term rentals.
These changes are being phased in gradually, with four tiers of property tax rates based on home value.
- Homes valued at or below the state median (about $325,000) will see tax rates drop from 1.35% to 0.76%.
- Second homes and short-term rentals will face a higher tax rate of 1.9%.
- Commercial properties will be taxed under a separate system, with limited relief.
- Pipelines and other infrastructure owned by major companies—including oil and gas—will be subject to a new 12% tax hike.
By 2026, a fourth tax tier will be added to give the system more flexibility.
Why are lawmakers doing this?
Montana’s housing market has changed rapidly.
The state has long attracted people looking for open space and natural beauty, but with the increase in demand has come a steep rise in home prices—and, by extension, property taxes.
According to Realtor.com, the income needed to buy a home in Montana has increased by 85% in just a few years.
That’s made it harder for many residents, especially long-timers, to stay in their homes.
Lawmakers say these bills are meant to help the people who live and work in the state—not just those buying vacation homes or investing in short-term rentals.
Also read: Uh oh! Your bank account could be seized by the IRS. Here’s why and how.
Who will pay more?
To balance out the revenue loss from the tax cuts, the state is shifting more of the burden to:
- Owners of second homes and short-term rentals
- Large companies and landholders—including energy companies with pipelines and other infrastructure
- Some commercial property owners
This tax shift has sparked debate in the state capital.
Supporters say it’s a necessary move to protect working families.
Critics argue it’s unfair and could create financial strain for businesses and property investors.
Also read: IRS warns Americans to secure their finances before disaster season heats up
Could this face pushback?
Possibly. Former lawmakers, tax experts, and local officials have raised concerns about how complex the new system is and how it might affect funding for schools and local governments.
Some parts of the plan may be challenged or delayed as the state finalizes the rollout.
The Montana Department of Revenue is now responsible for building the systems that will manage the new tax structure and ensuring it’s implemented fairly.
What does it mean for you?
- If you live in Montana and own your home: You may see your property tax bill go down—especially if your home is valued near or below the median.
- If you own a second home or rent short-term: Your taxes will likely increase under the new system.
- If you’re thinking about moving to Montana: The lower property taxes might make the state more appealing, but keep in mind that home prices have risen sharply.
- If you’re a business or landowner: You may be facing higher taxes, particularly if you own commercial or centrally assessed property.
Montana’s changes come at a time when housing affordability is a growing concern nationwide.
A recent Bankrate study showed that the income needed to buy a median-priced home in the US has jumped from about $78,000 in 2020 to nearly $117,000 today.
States across the country are searching for ways to keep housing within reach.
Whether Montana’s tax plan becomes a model for others—or a cautionary tale—remains to be seen.
Read next: Think twice before sharing that viral post—it could be a scam.
Do you own property in Montana? Have you felt the impact of rising taxes or housing costs? What do you think about shifting the tax burden away from primary homeowners and onto investors and corporations? Share your thoughts in the comments!
