One important aspect that homeowners need to take note of is property taxes. These taxes refer to the semiannual and annual charges that are levied by the local government. These are paid by the real estate owner for the property within the specific jurisdiction.
The specific amount of tax that is owed is a percentage of the assessed value of the specific real estate, thus an ad-valorem tax. Property taxes account for most of the revenue obtained by the local governments within the United States.
A basic explanation of property taxes for the homeowner
Property taxes are paid by the owner of the real estate. This can either be an individual or a legal entity (e.g., corporation). These taxes are not assessed for renters. For owners, the assessment is based on the primary residence of the owner, the rental property, the second home, or any other real estate that is owned. These forms of regressive tax become applicable regardless of the income level is of the taxpayer.
Calculations are done based on the value of the property owned. This can include any structures or land. The types of properties that are taxed, as well as the tax rates, vary according to the different jurisdictions. In some jurisdictions, tangible personal property is also taxed. These can be things such as boats or cars. Property tax rates in the United States are much higher than in other European countries.
A statewide property situation for residents of Montana
During the final days of the Montana Legislature’s 2025 session, a plan was laid out that would revise the property tax system of the state.
This plan would also provide a measure of tax relief for primary residences. House Bill 231 and Senate Bill 542 were also signed into law by Governor Greg Gianforte. During this session, these two bills were tied together. This created the “homestead” tax rates, which will start in 2026.
This applies to most of the residents within Montana’s long-term rentals, primary residences, and smaller commercial properties. It will, however, increase the rate for second homes and those whose value is four times higher than that of the statewide median. An interim system was set in place for 2025, this was mainly due to the fact that the Montana Department of Revenue would require more time to implement this.
The effect of the interim system on property owners
The interim system will adjust the residential property rates so that they are higher on those higher-value homes. It will also reduce the rates on homes with a value of less than $2 million. A further addition to this system is the one-time property tax rebate that will be applicable. The rebate is valued at $400 and only applies to the primary residence of a homeowner within the state.
Property tax rebates were previously offered to homeowners in Montana during the years 2023 and 2024. Property owners will now need to apply again for the rebate program available in 2025. According to the Department of Revenue, postcards will be sent out during the coming month to those individuals who may have an eligible residence. Individuals will be able to claim this rebate via the online portal.
Make sure you meet the claim deadline
The online portal will be open for claims during the period from 15 August 2025 up until 1 October 2025. Claims for the homestead tax rate will commence in December 2025. Those who apply and receive the property tax rebate will automatically qualify. That is, unless the home is not the primary residence of the owner anymore or has changed ownership.
This initiative has received some criticism, especially from business groups. The feeling persists that this system is not providing real relief, but rather just shifting a tax responsibility.
