Deadline for Tax Rate Reductions Extended

The deadline to apply for a couple of new property tax rate reductions has been extended through March 20.

Thursday, Gov. Greg Gianforte and Department of Revenue Director Brendan Beatty announced property owners wanting to apply for the homestead or long-term rental tax rate reduction have roughly three more weeks.

Earlier this week, Bryce Kaatz, with the Department of Revenue, told legislators long-term rental property owners had been slow to apply for the reduction.

Then, a flurry of last minute filings created technical issues for an online portal, according to a news release Thursday from the Governor’s Office and Department of Revenue.

In a statement about the extension, Gianforte said state government should be customer friendly and responsive, and no one should be penalized for a glitch.

“Our top priority is delivering permanent and meaningful property tax relief to the hardworking Montanans who call this state home,” Gianforte said.

For help

Taxpayers experiencing continued technical issues or seeking assistance with their application are encouraged to contact the Department of Revenue’s help line at (406) 444-6900 or visit their local county property assessment office.

Electronic applications must be submitted at homestead.mt.gov by midnight on March 20. Physical applications sent by mail must be postmarked on or before that same day.

This week, the Revenue Interim Committee heard updates on a couple of key property tax reduction bills the Montana Legislature adopted in its 2025 session, Senate Bill 542 and House Bill 231.

Residential owners had seen steep increases in property taxes in recent years, and those bills together aimed to provide relief to residents, including through a rebate, a graduated tax rate, and reductions for homes that are primary residences.

One bill, SB 542, is the subject of a lawsuit filed last month alleging it is unconstitutional, partly for rolling multiple ideas into one piece of legislation; the case is pending.

At the meeting this week, legislators heard about the lag in applications from long-term rental owners as well as the status of the property tax reduction for Montanans who live in their homes, the “homestead” exemption.

During the session, legislators and Gianforte worked to provide relief to Montanans who live in their homes as opposed to out-of-staters who own high-value properties here.

But some Montanans with vacation cabins saw property tax increases too, and at their meeting, legislators mulled that outcome. Previously, some lawmakers had warned about property taxes on cabins.

Sen. Greg Hertz, R-Polson and a plaintiff in the lawsuit, also said recently at a GOP event that taxes are not actually going down overall, they’re just hitting someone else.

“If your taxes went down $500, somebody else’s taxes in your school district, your city, your county, went up $500 because this is just a shift,” Hertz said. “It’s not somebody up in the Yellowstone Club or somebody up in Flathead Lake or Whitefish Lake … It is someone else in your tax jurisdiction, and most likely it’s another Montana full-time resident like myself. It’s a Main Street business owner.”

At the meeting, though, legislators heard a warning to proceed with caution with any future legislation so as not to harm the property owners they had just helped, those with homes at the median value.

“If you cut taxes on high value non-owner-occupied properties, someone else has to pay more,” said Rose Bender, with the Montana Budget and Policy Center.

Lagging for long-term rentals
Rep. James Reavis, D-Billings, wanted to be sure word gets out about the deadline to apply for long-term rental rates, initially March 2 but extended to March 20.

“Is there anything the agency or we as a legislature could do to make sure that we can educate landlords that there is an opportunity to get a better property tax rate when they are providing long-term rentals?” Reavis said.

In his presentation Monday, Kaatz said more than 21,000 applications had come in from owners of long-term rentals, and the department estimated Montana had 50,000 to 55,000, although he also said the number wasn’t precise.

But he also said a lot of outreach had taken place, and people might just be waiting until the last minute. The assessment seemed to be proving out; by Thursday, the department had seen an additional 4,000 or so filings.

To get the word out, Kaatz said the department mailed 109,000 postcards, sent press releases, made social media posts, conducted media interviews, and reached out to organizations such as the Montana Landlords Association.

Of the applications it received, the department made determinations on 9,200 so far, he said.

Homestead applications on track
Montanans who received a property tax rebate in 2025 were automatically signed up for a lower rate for their principal residence, for roughly 224,000 enrolled.

“If you did get that rebate last go-‘round, you’re probably covered, and you don’t need to light anything on fire for the moment,” said Sen. Becky Beard, R-Elliston.

As of Thursday, the department had received 21,000 additional applications for that new rate, with around 2,000 coming just this week.

It had made determinations on 7,000, Kaatz said. He also said paper applications take “a significantly longer amount of time to process.”

Changes under discussion
Residential property owners had seen stiff increases in their property taxes in recent years, including a median 21% jump after the 2023 legislative session, and last year, lawmakers focused on helping Montanans.

But the fix to protect primary residences meant secondary ones picked up the slack, including second homes owned by Montanans.

Some Montanans have said they just want to pass small family cabins onto their children, and the Montana Legislature is putting that dream out of reach.

Sen. Dave Fern, D-Whitefish, was among the legislators who asked whether the department can sort data for the value of “non-principal homes” in Montana.

Fern said he would like to understand not only the number of second homes owned by Montanans, which he believes is available, but also the different values of those second homes, family cabins versus luxury homes, or “what goes on in Big Sky.”

Kaatz said he believes more information will be available after the department processes new applications.

In the future, Beard suggested legislators consider adding additional classifications based on property use, such as residential for living, residential for recreation, and residential for work-related activities.

She said it might be a slippery slope, but doing so would avoid discriminating against owners of a property.

Jaret Coles, deputy director of legal services, agreed the focus should be on use, not individuals.

“It’s really about coming up with a classification system where everyone that is similarly situated is treated the same way,” Coles said.

In public comment, Bender, with the Budget and Policy Center, stressed the positive impacts legislation that came out of the 2025 Legislature had on everyday Montanans.

Leading up to the session, she said, property taxes had become more regressive, hitting hardest those who could least afford them.

But Bender said legislation started to address the disproportionate impact, and a “vast majority of homeowners” are paying lower residential property taxes as a result, with some 80% seeing decreases.

The Montana Budget and Policy Center is a progressively leaning organization, but in a recent statement about the pending lawsuit, Gianforte, a Republican, pointed to the same data point, that the bills he was proud to sign cut taxes for 80% of Montana homeowners.

Bender said the bills meant average Montanans saw their property taxes decrease, and without the legislation, just 13% would have seen decreases.

Bender said just 11% of residential properties saw tax increases, and those properties are homes with either “very high values or significant valuation increases.”

“We urge this committee to consider how changes geared toward lowering taxes on non-owner-occupied vacation homes will impact everyday Montanans in homes at or near the median value,” Bender said.