🏡 MONTANA PROPERTY TAX CHANGES: What Homeowners & Buyers Need to Know

Coming in 2025: Higher Taxes for Second Homes & Short-Term Rentals

Two new pieces of legislation—House Bill 231 (HB 231) and Senate Bill 542 (SB 542)—will change how Montana taxes residential property, particularly non-primary residences such as vacation homes, second homes, and short-term rentals.

These changes are designed to ease the tax burden for full-time Montana residents by shifting more of the responsibility to out-of-state owners and seasonal-use properties.

🔹 HOUSE BILL 231

New Tax Category for Second Homes & Rentals

Currently, all residential property in Montana is taxed at the same rate. HB 231 introduces a new classification that taxes second homes and short-term rentals at a higher rate than primary residences.

Affected properties include:
✔ Homes not lived in for more than 6 months/year
✔ Rental properties leased for less than 7 months/year

This change is meant to offer property tax relief to full-time residents while taxing seasonal or investment properties at a rate that reflects their usage.

🔹 SENATE BILL 542

Local Option Real Estate Transfer Tax

SB 542 gives counties and cities the option to add a transfer tax on high-value or non-primary residences at the time of sale. This tax won’t be automatic statewide—it will be up to local governments to adopt it.

The goal: Help communities, especially those with affordable housing shortages, raise funds through luxury or seasonal home sales.

❗ WHO WILL BE AFFECTED?

You may see increased costs if you are:
🔸 Buying a second home, vacation home, or short-term rental
🔸 An out-of-state buyer or investor
🔸 A current owner who doesn’t live in your Montana property for more than 6 months of the year

💡 Primary homeowners in Montana will still receive the homestead exemption and lower tax rates.

🗓️ TIMELINE

• 2025: New laws go into effect

• 2026: New tax assessments will show up on property tax bills

Now is the time to plan and budget for these upcoming changes.

✅ WHAT YOU SHOULD DO NOW

• Talk to your accountant or tax advisor to understand how your property may be reclassified

• If you’re planning to buy a second home or investment property in Montana, factor these changes into your financial planning

📬 STAY INFORMED

I’ll continue monitoring these developments through the Montana Association of REALTORS®, the Montana Association of Counties, and other trusted sources to keep you updated.

If you have questions or want to know how this impacts your real estate decisions, I’m always here to help.

Amy Brewster
REALTOR®
406-595-8489. amy@amybrewster.com
www.amybrewster.com