Montana Homestead Act

Background on the Changes

Montana's property tax system was restructured through bills like HB 231 and SB 542 in the 2025 legislative session. The goals included:

• Reducing taxes for most owner-occupied homes and stable long-term rentals.

• Not a great narrative and hardly true, lots of second homes and most short term rentals are owned by Montana residents

• Implementing a more progressive, tiered rate structure based on home value.

A transitional phase occurred in 2025, with interim tiered rates and a one-time up-to-$400 rebate for qualifying primary residences (for taxes paid in 2024, claimed by October 2025). The full system kicked in for 2026 taxes.

Key Features of the Homestead Reduced Rate (Starting 2026)

This applies statewide, including Gallatin County and Bozeman. It offers lower tax rates for qualifying properties compared to non-qualifying ones (which often will face a flat 1.9% rate).

Eligibility

• Primary Residences (Homesteads): You must own the property (as an individual, couple, or grantor revocable trust—not corporations, LLCs, or irrevocable trusts), live there at least 7 months per year, and be current on taxes.

• Long-Term Rentals: Rented for at least 28 days per tenant, occupied as the tenant's residence for 7+ months/year. Broader ownership allowed (including LLCs/corporations). Covers single-family homes, duplexes/triplexes/fourplexes, condos, townhomes, mobile homes (with up to 1 acre), and some properties on ag/forest land.

• Many who received the 2025 rebate were automatically enrolled for 2026 if ownership and use didn't change but enrollment is not guaranteed.

How to Apply/Verify

• Enrollment opened December 1, 2025.

• Deadline for new applicants: March 1, 2026 (for 2026 taxes).

• Check status or enroll online via the Montana Department of Revenue portal (e.g., homestead.mt.gov or the verification tool). I’d insert that link here to make sure people can see it. I’d also mention that this is not the same as the Homestead documents you may remember signing at closing, Montana Free Press (https://montanafreepress.org/2026/02/23/many-montana-landlords-havent-filed-to-avoid-second-home-tax/) estimates that potentially as many as three-quarters of the state’s rental stock has not filed for the long-term lower tax rate.

• New buyers, those who didn't get the rebate, or changes in use/ownership require application.

• If you fail to file by Mar 1, 2026 you will not be able to qualify for the lesser rate for 2026 and will likely face a higher tax rate.

2026 Tax Rates for Qualifying Properties

Rates are tiered based on the statewide median home value ($378,000 for the 2025–2026 cycle):

• 0.76% on value up to $378,000 (below median — biggest relief here).

• 0.90% on $378,001–$756,000 (1–2x median).

• 1.10% on $756,001–$1,511,999 (2–4x median).

• 1.90% on $1,512,000+ (4x median or more).

Non-qualifying properties (second homes, short-term rentals) generally pay a flat 1.90% rate across the board. This creates significant savings for most Bozeman homeowners with homes near or below the median, while higher-end or non-primary properties see higher effective taxes.

Projections suggest average reductions of around 18% over the transition for qualifying owner-occupied homes.

Why It Matters in Bozeman

Bozeman and Gallatin County have seen explosive growth, with home values often well above the statewide median due to influxes from remote workers, tourism, and outdoor appeal. Many locals face rising taxes from appreciating values.

This reform helps:

• Potentially stabilize costs for year-round residents and families.

• Note: Realtors are generally not in favor of this tax bill and are not proponents of the idea that STRs have any genuine effect on housing supply. There are plenty of studies, including local ones, that support this. Most STRs are higher priced homes that would have a higher rental value or sale value than adding to affordability. I’d try to stay away from this false narrative. 

• Many of our client’s are these second home buyer’s, I don’t want to include language that states or inclines that this tax is a good thing or that discouraging out-of-state second home owners from purchasing properties in Montana. 

However, some concerns exist: landlords with short-term or inherited properties, or those in corporate structures, may face higher bills if they don't qualify. Realtors have noted potential unintended impacts on certain markets.

Bottom Line

If you're a Bozeman homeowner living in your primary residence or a landlord with stable, long-term tenants, this could mean meaningful savings on your 2026 (and future) property tax bills. Many are already enrolled automatically from the 2025 rebate—verify your status today to ensure you're benefiting.

For the latest details, application, or to check enrollment, head to the official Montana Department of Revenue page: https://revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals. If your situation is unique (e.g., mixed-use property or recent purchase), consider consulting a local tax advisor or the DOR directly.

This change represents real, targeted relief amid Montana's housing and tax debates—prioritizing those who call the state home year-round.

Here are two alternative versions: 

Montana Property Tax Update: March 1 Filing Deadline Is Critical

Background on the Changes

Montana’s property tax structure was revised during the 2025 legislative session through HB 231 and SB 542. Beginning with the 2026 tax year, the state implemented a new tiered classification system.

The primary changes:

• A reduced tax rate for qualifying primary residences and long-term rentals
• A tiered structure based on home value relative to the statewide median
• A higher classification rate for properties that do not qualify

A transitional year occurred in 2025, including a one-time rebate of up to $400 for qualifying primary residences. The full system applies to 2026 property taxes.

Homestead & Long-Term Rental Reduced Rate (Effective 2026)

This applies statewide, including Gallatin County and Bozeman.

Properties that qualify will receive lower tax rates than properties that do not qualify. Non-qualifying properties are generally taxed at 1.90%.

Who Qualifies

Primary Residences (Homestead)
• Must be owned by an individual, couple, or grantor revocable trust
• Must be occupied at least 7 months per year
• Taxes must be current
• Corporations, LLCs, and irrevocable trusts do not qualify

Long-Term Rentals
• Rented for 28 days or more per tenant
• Tenant must occupy as their residence for 7+ months per year
• Broader ownership structures allowed, including LLCs and corporations
• Applies to single-family homes, duplexes, triplexes, fourplexes, condos, townhomes, mobile homes (with up to 1 acre), and certain properties on ag/forest land

Important:
This filing is NOT the same as the homestead form you may remember signing at closing. That prior form does not automatically qualify you under the new system.

March 1, 2026 Deadline — Do Not Miss This

Enrollment opened December 1, 2025.

If you are not already enrolled, you must file by March 1, 2026 in order to receive the reduced rate for the 2026 tax year.

If you miss the March 1 deadline:

• You will not qualify for the reduced rate for 2026
• Your property will likely be taxed at the higher 1.90% rate
• There is no retroactive correction for the 2026 tax year

Many homeowners who received the 2025 rebate were automatically enrolled for 2026 — but enrollment is not guaranteed.

According to reporting from Montana Free Press, a large portion of eligible rental property owners have not yet filed. Do not assume you are enrolled.

Verify your status or enroll immediately through the Montana Department of Revenue:

https://revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals

2026 Tiered Rates for Qualifying Properties

Rates are based on the statewide median home value of $378,000 for the 2025–2026 cycle:

• 0.76% on value up to $378,000
• 0.90% on $378,001–$756,000
• 1.10% on $756,001–$1,511,999
• 1.90% on $1,512,000+

Non-qualifying properties are generally taxed at a flat 1.90%.

For many Bozeman homeowners, especially those near or below the median, the difference can be meaningful. For higher-value homes, the classification status still significantly affects the effective rate.

Why This Matters in Bozeman

Gallatin County property values often exceed the statewide median. Classification status under this new system can materially impact annual tax liability.

If you own:

• A primary residence
• A long-term rental
• A recently purchased home
• A property held in a trust or entity
• A property that changed use in the past year

You should verify your status immediately.

Bottom Line

If you qualify and fail to file by March 1, 2026, you will likely pay a higher tax rate for the entire 2026 tax year.

This is a one-step verification process that could meaningfully affect your tax bill.

Check your status today:
https://revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals

If your ownership structure or use is unique, contact the Montana Department of Revenue or your tax advisor promptly.

Do not assume you are enrolled. Verify before March 1.

Montana Property Tax Update: File by March 1 or Pay the Higher Rate

Montana’s property tax system changed under HB 231 and SB 542. Beginning with 2026 taxes, properties that qualify as primary residences or long-term rentals receive a reduced rate. Properties that do not qualify are generally taxed at 1.90%.

If you have not verified your status, the deadline to file is March 1, 2026.

Miss it and you will likely pay the higher rate for the entire 2026 tax year. There is no retroactive correction.

Who Qualifies

Primary Residence (Homestead)

• Owned by an individual, couple, or grantor revocable trust
• Occupied at least 7 months per year
• Taxes current
• LLCs, corporations, and irrevocable trusts do not qualify

Long-Term Rentals

• Rented 28+ days per tenant
• Tenant occupies as their residence 7+ months per year
• LLCs and corporations are allowed
• Applies to most residential property types

Important: This is not the same homestead form you may have signed at closing years ago. This is a new classification system.

March 1, 2026 Deadline

Enrollment opened December 1, 2025.

Some homeowners who received the 2025 rebate were automatically enrolled, but enrollment is not guaranteed.

Many eligible property owners have not filed.

If you do nothing and are not enrolled, your property will likely default to the 1.90% rate for 2026.

Verify or enroll immediately through the Montana Department of Revenue:
https://revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals

2026 Tiered Rates (Qualifying Properties)

Based on the statewide median value of $378,000:

• 0.76% up to $378,000
• 0.90% from $378,001–$756,000
• 1.10% from $756,001–$1,511,999
• 1.90% above $1,512,000

Non-qualifying properties are generally taxed at 1.90%.

In Gallatin County, where values often exceed the statewide median, classification status can materially affect your annual tax bill.

Bottom Line

If you:
• Live in your home
• Own a long-term rental
• Purchased in the last year
• Hold property in a trust or entity
• Changed how the property is used

Verify your status now.

March 1 is a hard deadline.
Missing it likely means paying the higher rate for 2026.

Check today:
https://revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals