HELENA — It took until the final days of the Montana Legislature’s 2025 session, but lawmakers did eventually hammer out a final plan to revise the state’s property tax system and provide tax relief for primary residences. Last week, Gov. Greg Gianforte officially signed two key bills into law. Now, it will be up to state agencies to put the tax plan into action.
(Watch the video for more on what property owners can expect from these bills.)
“The governor was proud to sign into law House Bill 231 and Senate Bill 542 to deliver meaningful and permanent property tax relief for Montanans in the place they call home,” a spokesperson for Gianforte’s office said in a statement to MTN Monday. “Delivering the Homestead Rate Cut, developed by the governor's bipartisan, diverse Property Tax Task Force, was one of his top priorities this legislative session. The governor is grateful to each member of the Legislature who joined him in delivering meaningful, lasting property tax relief to Montanans.”
HB 231 and SB 542 were tied together near the end of the session. In their final form, they create “homestead” tax rates starting in 2026 – lowering the property tax rate on most Montanans’ primary residences, long-term rentals and smaller commercial properties, but increasing the rate for second homes and those worth more than four times the statewide median value.
Because the Montana Department of Revenue needs more time to fully implement the homestead rates, the bills also establish an interim system for 2025. They will adjust residential property rates so they’re higher on higher-value homes – in general, reducing the rates on homes worth less than $2 million. In addition to the new rates, the state will offer a one-time property tax rebate of up to $400 this year on a Montana homeowner’s primary residence.
The state previously offered property tax rebates to homeowners in 2023 and 2024. Property owners will again need to apply to receive this year’s rebate. A spokesperson for the Department of Revenue says they will send postcards next month to people whose residences may be eligible. The online portal to claim the rebate will be open from Aug. 15 to Oct. 1.
Homeowners will also need to apply to claim the homestead tax rate, starting in December 2025. However, anyone who applies for and receives the property tax rebate this year will automatically qualify, unless their home has changed owners or is no longer their primary residence.
Throughout the legislative process, bills like HB 231 faced opposition from business groups, like the Montana Chamber of Commerce. Chamber president and CEO Todd O’Hair said they concluded that the proposals would only shift who’s paying taxes instead of really providing relief. He said Montana needs to look at whether the current tax system still works as the state continues to shift from an economy reliant on natural resource production to one centered on services.
“We think that there's a good chance this will be, once again, the issue of 2027,” O’Hair said. “And until we have that serious conversation and come up with viable alternatives to the current tax system that we have in Montana, our concern is that the squeeze is going to continue to be on that larger industrial base in the state of Montana which has been paying a huge chunk of the property tax over the course of our history of our state.”
O’Hair said the Chamber is concerned both about the increased tax burden that could fall on large companies like utilities, mines, oil and gas producers and the timber industry, and that the relief for residential taxpayers might not be as large as expected.
Supporters of HB 231 and SB 542 have noted that many large industrial employers have seen their property taxes fall since 2021, as residential property values in the state spiked and led to a larger share of the tax burden falling on homeowners.
O’Hair acknowledged some of the large companies did pay lower property taxes in recent years, but said it was because their business valuations also went down.
“Our argument has been that, had residential property values gone down, we wouldn't be arguing to try to shift more burden onto them today,” he said.
EDITOR'S NOTE: This article has been updated to include a corrected video.
