Out-of-State Buyers In Montana Face Major New Costs

How Montana’s New Tax Law Hits Second-home Owners

For decades people have been buying a second property in Montana, but during the pandemic the amount of out-of-staters buying real estate in the Treasure State exploded.

Now, new property tax changes could result in a significantly higher property tax bill for individuals who own vacation homes and second properties in Montana.

Will Vacation Home Taxes Lower Your Local Bill?

Starting in 2026, a new tax rate, named "Homestead Rate Cut," will go into effect for both full-time and part-time residents.

Those of us whose primary residence is Montana, along with those who have long-term rentals and smaller commercial properties, will have their property taxes lowered.

That means those who have second homes, vacation homes, or those who own houses worth more than 4 times the median value in Montana will have their rates increased up to 1.9% of the properties' value, but of course there are some critics of this new plan.

What The Homestead Rate Cut Means For Montanans

According to Realtor.com Manish Bhatt, who is a senior policy analyst at the Tax Foundation, said this about the new tax rates:

Realtor.com explains this further, saying those places with lots of second home properties might see a revenue boom, while those communities with only primary residence properties could experience a budget shortfall.

It's possible as well these new tax rates could cool the real estate market in Montana and make those who thought of buying property here look elsewhere.

Ever wondered what states have the most property owned in Montana? Check out our gallery below to see the top 10 states who have the largest share of Montana's taxable property.