The Lee Enterprises Montana State News Bureau is closely following major bills moving through the 2025 Montana Legislature, including proposals related to property taxes. Montana residents' appraised home values -- and therefore their property tax bills -- ballooned over the last couple years, pushing some into a financial bind. The Montana Department of Revenue recently said tax bills could rise again if the Legislature does not take certain steps. Lawmakers have a choice on whether or not to lower property tax assessment rates, though rates alone do not determine property tax bills. Local government budgets, school budgets, voter-approved mill levies, housing supply and a slew of other factors impact the dollar amount on a property tax bill.
Here are the latest updates on proposed property tax legislation in Montana:
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Overview: A leading remedy for property taxes are homestead and "comstead" exemptions, which look different depending on who you ask. One approach would provide reductions in property taxes for primary residents and small commercial business owners, while increasing rates for part-time Montana residents. Depending on how this bill takes shape, legislation could result in higher property tax rates for people with second homes, short-term rentals and large commercial businesses. Other proposed homestead exemptions would free a chunk of one's home value from taxation and implement a tiered rate system that would to raise taxes on higher value homes and cut them on the lower value homes.
Update: Wednesday, Feb. 12
House Bills 231 and 155 went before the House Taxation committee for initial hearings.
HB 231, sponsored by Rep. Llew Jones, R-Conrad, a key Republican property tax bill and is backed by Gov. Greg Gianforte. It would lower property taxes on primary residences, landlords with long-term rentals and tens of thousands of commercial businesses, while making up the lost tax revenue largely by increasing the tax burden on short-term rentals like Airbnbs and second homes.
Proponents, like Jones and Gianforte, say the philosophy behind the approach is that out-of-state homeowners do not pay income taxes in Montana, but still benefit from things like hospitals and public safety agencies funded by state income taxes. Opponents argued that the bill does not directly target renters and it would raise taxes for some of the bigger businesses.
House Bill 155, sponsored by Missoula Democratic Rep. Mark Thane, also received mixed reactions from lawmakers.
The legislation would exempt the first $50,000 of the market value of a residential property from taxation in addition to taxing the first $200,000 of commercial property at 1.4%, which would be a 25% cut. From there, the bill would implement tiers of tax rates that increase as the value of the property increases.
Opponents of HB 155 argued the blanket exemption of $50,000 stands to harm some counties where there aren't many homes valued over $50,000 by depleting a large portion of the county's tax base and shifting it on to other classes of property.
Both bills are at similar points in the legislative process: They passed the House and have been heard, but not voted on, in the House Appropriations Committee.
406 Politics Three far-reaching property tax bills begin legislative journey Victoria Eavis Renter credits
Many landlords across Montana have continually raised rents as they've seen their property tax bills go up. The Democrats are bringing a few renter credit bills, one that would provide homeowners and renters a credit on their property tax bill that's relative to their income. Critics say that they would rather see renters' financial issues addressed from the housing supply side, as opposed to doling out credits based on income levels.
Update: Thursday, January 23
During a House Taxation committee hearing, Rep. Jonathan Karlen, D-Missoula, said his House Bill 154 would deliver "nuanced" relief to homeowners and renters. This legislation is the party's chief method of addressing the tax burden on renters.
As written, renters and homeowners making up to $150,000 a year would be eligible for a tax credit that's calculated based on their property tax bill relative to their income. For example, if a person makes $70,000 per year and their property tax bill is $5,000, they would receive an $1,800 credit.
For a renter, because they don't receive a property tax bill directly, 15% of the annual cost of their rent acts as the property tax bill in the proposal's equation. So, a renter who makes $38,000 per year and pays $1,000 in rent every month would receive a $700 credit. A renter who makes $38,000 per year and pays $1,000 in rent every month would receive a $700 credit.
Lawmakers on the House Appropriations committee are set to vote on the bill in the coming days.
Mill levies
Overview: Local governments put mill levies before voters to raise more money for entities like a new library, more police, another fire station, weed removal efforts, but when they pass, they can contribute to rising property taxes. During the 2024 elections, voters rejected scores of mill levies, even in cities that tend to vote them through, which many at the Capitol theorize was due to rising property taxes. Multiple bills this session, including at least three backed by the Governor, aim to rein in that local spending by changing how the state administers these mills.
A mill is a way of describing how much is owed in taxes based on each dollar of a property's taxable value. One mill generates $1 for every $1,000 of a property's taxable value
Update: Thursday, February 6
Several bills said to help address rising property taxes by reining in local levies started making their way through the Legislature and a few have already drawn the ire of lobbyists representing Montana's schools, firefighters, cops and municipalities.
One proposal, House Bill 20, would force local governments to put most levies in dollars as opposed to mills on voters' ballots. Mills are not straightforward, and that's part of what HB 20's sponsor, Rep. Larry Brewster, R-Billings, wants to address.
406 Politics Governor's priority property tax bills draw backlash from firefighters, cops, schools Victoria Eavis 0 Comments Get Government & Politics updates in your inbox!
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