Property taxes in the U.S. have climbed alongside home prices in recent years, contributing to the ongoing affordability crisis plaguing the country. But in Montana, homeowners could soon see some relief as legislators discuss a proposal to cut property taxes on primary residences.
Why It Matters
Between 2019 and 2024, property taxes surged in nearly every American metropolitan area, according to a report released by Redfin last year. The biggest increase in the country was reported in Indianapolis, Indiana, where the typical homebuyer paid 66.7 percent more in median monthly property bill last year compared to 2019. It was followed by Atlanta, Georgia, with a median monthly property bill that was 65.8 percent higher than before the pandemic.
Cities in the Southeast also saw some of the biggest increases in property taxes in the nation, with Florida’s Jacksonville and Tampa both reporting surges of nearly 60 percent since the pandemic.
While in many Republican-led states governors and lawmakers have tried to lower property taxes for years now, their efforts have recently been galvanized by Donald Trump’s return to the White House and his focus on cutting taxes as a priority for his administration.
What to Know
In Montana, a bill that would lower property taxes for primary residences, long-term rental properties and smaller commercial properties while increasing taxes on secondary residences is currently being considered by the state Senate.
The proposed law, House Bill 231, was drafted as a result of a task force created by Governor Greg Gianforte, a 63-year-old Republican, last year to reform the state’s property tax system and lower payments for Montana homeowners.
Also known as the “homestead” bill, the legislation introduced by Republican Rep. Llew Jones would lower property taxes by 17 percent for about 230,000 homeowners in the state, the lawmaker said. Property taxes would instead rise by approximately 53 percent for vacation homes and short-term rentals—properties whose owners are likely based out of state, according to Jones.
Montana Gov. Greg Gianforte attends the 100th anniversary of the Livingston Roundup Rodeo Parade as grand marshal on July 2, 2024, in Livingston, Montana. Montana Gov. Greg Gianforte attends the 100th anniversary of the Livingston Roundup Rodeo Parade as grand marshal on July 2, 2024, in Livingston, Montana. William Campbell/Getty Images
Realtor.com reported that the number of secondary-property owners in Montana grew during the pandemic, with as much as 20 percent of all home sales in Montana in 2021 being for second homes. While in 2022, 2023 and 2024 the share of sales of secondary homes steadily declined, last year it was still above 10 percent.
“As of 2024, the share of second-home sales is nearing pre-pandemic levels, but the elevated levels of non primary-residence sales from 2019 to 2022 have created a healthy stock of currently owned second homes,” Realtor.com wrote.
According to SmartAsset, Montana has relatively low taxes compared to other states, at a rate of 0.79 percent—lower than the national average of 0.90 percent. The Tax Foundation reported that in 2023, the average property tax rate in the state was slightly lower, at 0.75 percent.
While relatively low, officials said in 2021-2022 that property taxes in the state accounted for 9.9 percent of state taxes compared with 2 percent for all states combined; 50.4 percent of state revenues in that same year came from individual and corporate income taxes.
HB 231 has been tied to another bill, HB 154, which is a priority proposal for Montana House Democrats. The proposed legislation, sponsored by Democratic Rep. Jonathan Karlen of Missoula, would create a “housing fairness” income tax credit; under the proposal, homeowners and renters in the state would be able to use the credit to offset some of their property taxes or renter equivalent if their household income is below $150,000.
What People Are Saying
Kaitlin Price, deputy director of communications for Gov. Gianforte, said in a statement shared with Realtor.com: “The proposal is projected to directly reduce property taxes for more than 215,000 primary residences and more than 32,000 small businesses, as well as provide indirect relief to over 130,000 renters.”
Rep. Jones told KTVH: “Is this bill perfect? No. I wish I could have figured out how to do a perfect bill, I don’t know how. It does do good work.”
He wrote on X: “23 percent of Montana’s residential tax value is tied to out-of-state addresses. HB 231 ensures vacation homeowners pay their fair share for MT’s roads, schools, and services—funding permanent property tax relief for 230,000 homeowners and 130,000 renters. Vote yes on HB 231.”
What’s Next
Both HB 231 and HB 154 are now being considered by the Montana State Senate Taxation Committee, where they could be subject to amendments before they are moved forward. The proposed legislation would then need Gov. Gianforte’s signature to become law.
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