Montana is taking action to help people struggling with rising house prices and property taxes. The state has passed two new bills that aim to lower property taxes for those who live in their homes full-time. Instead of putting the tax burden on everyday homeowners, the new rules shift more of the cost to owners of second homes, big utility companies, and industrial businesses.
Why Did Montana Cut Property Taxes?
In recent years, home prices in Montana have gone up a lot. As a result, many people have seen their property taxes shoot up, making it harder to afford to live in their own homes. Lawmakers wanted to ease that pressure, and on April 30, they passed two important bills: House Bill 231 and Senate Bill 542.
These laws are a big part of Governor Greg Gianforte’s plan to protect primary homeowners from unfair tax increases. The idea is to make sure people who only own one home get a break, while those with multiple properties or large industrial operations pay more.
What Do the New Bills Do?
House Bill 231 is the main bill that shifts taxes away from regular homeowners. It focuses on taxing second-home owners more instead. However, this move caused some concern. People who rent out vacation homes or own extra properties for income felt the bill was unfair. Cities also worried it would leave gaps in local budgets.
To address those issues, lawmakers added Senate Bill 542. This bill spreads the tax load more evenly, including industrial properties like refineries and utility companies. Still, some large businesses pushed back, warning that the changes might lead to job losses or higher energy bills.
Even with the debates, both bills were passed into law. State Representative Llew Jones said the changes were necessary to get the results Montana needs.
When Will Homeowners See Savings?
The changes won’t happen overnight. The new homestead exemption, which protects people’s main home from higher taxes, will begin in 2026. Once it kicks in, the average Montana homeowner is expected to save around $719 per year. That’s based on the current median home price in the state, which is about $459,370 according to Zillow.
What Are Other States Doing?
Montana isn’t alone. Other states are also looking for ways to cut or even eliminate property taxes. Texas is working on a plan for tax relief, and states like Florida, Illinois, Kansas, and Pennsylvania are also exploring big changes.
Florida’s Governor Ron DeSantis has even suggested a constitutional amendment to get rid of property taxes completely. Since property taxes are usually managed by local governments, this change would need approval from 60% of Florida voters. DeSantis believes property taxes are one of the worst forms of taxation and wants to shift to other methods like sales taxes.
Expert Insight: Why Is This Happening?
According to David Schleicher, a professor at Yale Law School, the main reason for all these changes is the surge in home prices after the COVID-19 pandemic. With remote work becoming more common, many people moved to bigger homes or different areas. This sudden increase in demand pushed housing prices up, especially in suburban and rural areas.
At the same time, office spaces became less valuable, leading to changes in how cities and states collect tax revenue.
Other States Offering Tax Help
Besides property tax cuts, some states are giving direct financial help to their residents. For example, Georgia is sending out a rebate of $500 to people who qualify under three key criteria. In New York, there’s a tax credit worth up to $1,000 available for certain residents.
Montana’s new laws aim to make owning a home more affordable for people who actually live in them. While the changes have sparked some debates, they mark an important step toward balancing the tax system. Other states are watching closely, and many are working on their own solutions as the housing market continues to change. Whether it’s through cutting taxes, giving rebates, or creating new plans, the goal is the same—help people keep their homes and stay financially stable.
