The 2025 Montana Legislature passed two landmark property tax relief bills, House Bill (HB) 231 and Senate Bill (SB) 542, which provide substantial reductions for homeowners, farms, ranches, and small businesses across Montana. This protects Montana residents, especially those on fixed incomes and young families, like the homestead exemptions in almost every other state.
Because some, led by the Freedom Caucus, delayed passage until very late in the 2025 session by opposing homestead tax exemptions, the relief is staggered over two years.
Tax Year 2025 (TY25)
Carbon County owner-occupied homes saw an average decrease of 7.5%. Farms and ranches saw an average 5% increase in TY25, and small businesses saw about a 9% increase. These short-term bumps are the result of the delays in passing the legislation, causing staggered implementation.
Tax Year 2026 (TY26)
In TY26, significant decreases take effect in Carbon County:
- Farms and ranches will see an approximately 10% decrease
- Small business properties will see an approximately 17.5% decrease
- Qualified homesteads get another average 17% decrease.
- Long-term rentals will see a 30% decrease because all implementation was delayed to Tax Year 26.
These changes are designed to protect Montana residents, but there are increases in second homes and short-term rentals. They also corrected the tax holiday that many industrial properties received from 2021 to 2024. As out-of-state buying pressure pushed up the value of homes, taxes shifted from industrial to residential properties.
For reference, these are the same bills that Americans for Prosperity (AFP) claims “gave cities a blank check to spend more money.” That is false. HB 231 has nothing to do with local spending. Remember, AFP works for its out-of-state corporate donors. Some of those donors own the industrial properties that lost their tax holiday. It is also important to understand that income taxes pay for state spending and property taxes pay for local spending.
If you received the $400 property tax rebate in 2025, your homestead has already been automatically enrolled to receive the lower TY26 tax rates. No further action is needed for your primary residence.
DEADLINE EXTENDED: Register by March 20, 2026
If you have not yet enrolled, the deadline has been extended to March 20, 2026. The following property types must register to receive reduced tax rates:
Homesteads – Primary residences owned by individuals or grantor revocable trusts
Long-term rentals
- Properties leased to tenants 28+ days at a time for at least 7 months per year
- Properties held in LLCs, corporations, or irrevocable trusts
- Owner-occupied properties held in an LLC or trust where the owner leases the property to themselves as part of employment or member compensation
You can enroll online and verify your enrollment here: revenue.mt.gov/property/property-tax-changes/homesteads-and-long-term-rentals.
Note for LLC & Trust-Owned Properties
The Montana Department of Revenue has clarified that properties owned by an LLC or trust where the owner occupies the property as part of employment or membership compensation should register as a Long-Term Rental (LTR). This also applies to workforce housing. Owners should estimate rental income and expenses in good faith. If this applies to you, do not miss the March 20 deadline.
Please help get the word out. If you are a long-term renter or live in workforce housing, make sure that your landlord knows. If you have questions about these changes or need help enrolling, please reach out.
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